That means insurers can determine rates based on health conditions when they issue the policies, with no upper limits on the initial rate or on rate increases upon renewal. Only 31 states have limitations on the use of preexisting condition exclusions. That means insurers can permanently exclude named conditions - the insured will never have coverage for those conditions. Only 12 states have some form of guaranteed issue. That means insurers can reject coverage entirely based on health status.
Some statistics are enlightening.
Those who were rejected, up until this year, had as an option to buy an open enrollment product, without medical underwriting, that had substantially fewer benefits than the underwritten product, even though the open enrollment product is subsidized by the state. The Kansas Insurance Commissioner recently had occasion to compare premium rates in the small group and individual markets. While the small group market does contain rate fluctuations, there is an upper limit because of rating restrictions, and the fluctuation is not nearly as dramatic as that in the individual market. Importantly, generally people in small groups cannot be refused entrance into the market for medical reasons. Although the higher deductible policy premiums are much lower, it is difficult to imagine that the targeted market, the uninsured, could afford such a deductible or would find what is essentially catastrophic coverage, rather than comprehensive coverage, attractive.