What is Medical History Disregarded (MHD) underwriting for private medical insurance?

With Medical History Disregarded (MHD), unlike Full Medical (http://bit.ly/2xmUInG) or Moratorium (http://bit.ly/2ixmN9h) underwriting previous medical history is totally ignored and pre-existing health conditions are covered.

Sound good? Well, let’s explore how MHD underwriting works and whether it would be good for you!

How Can I Get MHD Underwriting?

Anybody with pre-existing health conditions would prefer MHD terms and as you might imagine if the insurers offered MHD to everyone and anyone the insurers would soon be facing huge losses. Resultantly insurers do limit availability and currently, there are only six situations where you could end up with MHD terms;

1. MHD is available at the onset for new company policies usually with 20 plus members.

2. If you are changing jobs and want to continue with MHD terms you may be offered MHD by the businesses insurer as a “Group Leaver”. The premium will be expensive and not all insurers will offer it to you.

3. To cover conditions developed in the womb MHD terms are often available to newborn infants enrolled to existing individual or company policiies.

4. If your parent’s employer’s policy is MHD and you’re covered as their dependent you’ll have MHD terms.

5. If you were covered in the past as a dependent on your parents’ employer’s MHD policy you may still have MHD terms if they maintained the MHD cover when they left their employment.

6. Some company schemes with less than 20 members sometimes have MHD terms. This is usually because they were a larger group when they set the policy up or they could be a smaller company that has broken away from a larger company retaining the MHD underwriting.

Advantages of MHD

1. Pre-existing conditions will be covered. It is important to note that not even MHD terms mean that you’ll be covered for the ongoing management of “Chronic” conditions such as arthritis, asthma or diabetes.

2. As an employer with an MHD medical policy you will be attractive to prospective employees and it will be a valued benefit to your existing staff.

3. As the employer, if one of your main reasons to have medical insurance is to get people treated quickly, then you know that claims won’t be turned down due to being pre-existing conditions.

4. Setting up a new company plan with MHD is quick and easy as there are no health questionnaires to complete so it’s a much simpler application process.

5. There are no medical records to check when claiming so claims are simple.

6. During the setup process, you are not required to disclose full medical history’

Disadvantages of MHD

For companies;

1. MHD is the highest risk of all types of underwriting and it is the most expensive premium option.

2. As there are a smaller number of insurers who offer MHD terms there are fewer options to switch insurers in the future.  Reduced competition will make it harder to contain costs in the longer term.

3. It’s also important to remember that even if “switching” insurers on MHD terms that the new insurer will still have a health declaration that you need to satisfy and this could lead to new medical exclusions being imposed.

For individuals;

1. If you’ve been offered MHD terms as a Group Leaver then it will cost significantly more than other underwriting options.

2. Having MHD underwriting in place on an individual policy will significantly reduce your options to move insurers in the future as many insurers will not accept ‘switching’ on an individual MHD basis. We’d recommend that if you are in good health and have an MHD policy that you consider re-underwriting as in the longer term it will be much easier to help you save money be moving to different insurers.

3. If you have MHD terms on an individual policy, or with your current employer, if you take up a position with a company where the medical insurance is not MHD you may not be able to transfer your underwriting to the new scheme and you will lose coverage for any pre-existing conditions.

4. It’s also important to remember that even if “switching” insurers on MHD terms that the new insurer will still have a health declaration that you need to satisfy and this could lead to new medical exclusions being imposed.

Summary

As you can see there are “pros” and “cons” to MHD underwriting. For somebody in good health, with no previous medical conditions, there is no benefit to having MHD terms, and there’s plenty of disadvantages.

To find out more about whether medical history disregarded underwriting would be good for you or not, call us today and speak to one of our Health Insurance Consultants.

Simon Milner 2/10/2017