Extravagant Consequences: Lying on Your Health Insurance Application

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The following is a guest post. Enjoy!

Health insurance is one of those added expenses that many of us dread being a necessity of our lives as human beings. We get sick, we get injured, and while paying out monthly premiums for health insurance is expensive, it’s even more expensive—not to mention dangerous—to go without it.

Occasionally, you’ll hear from a friend, co-worker, or even family member about how they lied on their health insurance application to get a lower premium and they might even boast about how easy it was. As the saying goes, though, “It’s easy… until it isn’t.”

WHY LYING MIGHT NOT BE NECESSARY

First off, let’s address the necessity of lying.Through 2014, individual insurance providers are actually not allowed to charge extravagant premiums, or refuse coverage, for most pre-existing conditions under the new health care reform.

Due to this, you might put down a lie on your application and end up paying for it down the line—paying for it, literally—and you might have been able to avoid it entirely just by telling the truth.

Before you make the very hefty decision to lie on your health insurance application, you should absolutely consult with a health insurance specialist who can break down for you what your pre-existing condition entails. You can even ask a few sly questions about how the insurance company will find out about your condition, just to be ahead of the curve. If your condition is present in your medical history, they will find out about it.

WHAT WILL HAPPEN IF YOU’RE CAUGHT LYING

Usually, this is either going to happen right at the outset of your application process, if the insurer decides to do a little digging right off the bat, or it’s going to happen when the time comes for your to file a major claim.

Insurance companies want to save money, first and foremost, so they will pull up all of your records and cross check them against your application. If anything at all doesn’t add up, they’ll dig deeper, and as soon as they unearth a lie they will cancel your policy. In fact, they have reviewers on staff whose sole job is to try to discredit your application.

Once they do find out about your lie, you will be subjected to the following:

Complete void of contract dated all the way back to its outset;
All outstanding claims still in processing will be dropped from coverage and the full financial responsibility of these medical bills will be placed at your feet;
Your insurance company may sue you for claims that they’ve previously paid out, requesting full reimbursement for the amounts paid out;
Future health insurance providers you attempt to sign with will be able to see this previous falsehood on your record and may choose not to cover you.

Of course the best way to avoid being caught is to not be fraudulent in the first place! You should only deal with reputable companies, where you know they have a proven track record of satisfied customers. This is the best way for everyone to have peace of mind!

How about you all? Have you ever known anyone who placed a small or large lie on their application when they applied for health insurance?

Did anything bad ever happen to them?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

There’s some profound truths to this article above.
In general, since there is so much money at stake, you can rest assured that insurance companies are VERY smart. They have professionals who spend their entire working lives optimizing the insurance company monetary streams to improve operations. How can normal people think that with a 2 min lie, they are going to get ahead this way? It really just isn’t worth it in the long run!
With finances, always tell the truth, even if the truth is painful at times!

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/f/f0/PinocchioChiostri22.jpg

About the Author Jacob A Irwin

Hi folks! My name is Jacob. I am the owner and operator of My Personal Finance Journey. I started this blog in January of 2010 and have enjoyed the journey ever since. Since finishing up graduate school in Virginia in 2014, I have been working in biopharmaceutical development in Colorado. You can read more about me and this site here. Please contact me if you have any questions!

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Lizzy Winters says:

January 4, 2016 at 11:21 am

I am in a situation where it costs me over 680$ a month for health insurance, and it’s insurance I can’t use. I am 62 yrs old making more than 49,000$ a year. My husband is disabled so I can only work part-time. The health insurance at this high price has a huge deductible, so I can’t go to the Dr. I have to pay full price on top of the premium. Is there a solution?

myfijourney says:

March 26, 2013 at 12:22 am

I will admit to knowing someone who is currently lying on their health insurance. And given their medical expenses, I really hope that they don't get caught. There is no way that they could handle the expenses without insurance.
My recent post ConocoPhillips (COP) Dividend Stock Analysis

MyPerFinJourney says:

March 26, 2013 at 1:26 pm

Oh wow! Dangerous ground there! Does he or she feel pretty confident they can get away with it?
My recent post How Can You Save Money When Purchasing an Engagement Ring? – Lessons from Personal Experience

Reply

Extravagant Consequences: Lying on Your Health Insurance Application

WHY LYING MIGHT NOT BE NECESSARY

WHAT WILL HAPPEN IF YOU’RE CAUGHT LYING

About the Author Jacob A Irwin

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