As new insurance options become available through the state health insurance marketplaces, you may need or want to cancel or change your current individual health insurance policy.
This article will help you cancel your individual health insurance policy the right way to protect your finances and future coverage.
How to cancel your individual health insurance policy the right way
Follow these seven tips when canceling or changing your individual health insurance policy:
- Call your insurance company: Sending an email or mailing a letter won’t cut it. Your insurance company’s phone number is usually located on the back of your insurance card. Most insurance companies require the policyholder to call directly, but you should check your policy’s "terms of cancellation" to understand your responsibilities. You will want to have all of your policy information on hand, including the plan name and policy number as well as any security questions you use for online accounts to confirm your identity with the insurance representative.
- Follow steps confirmed by the insurance rep: During your call, the insurance representative will confirm the steps you must complete to successfully cancel or change your insurance plan. Every insurance company has a cancellation policy that you need to follow exactly. For example, some insurance companies require that you fax or mail them a letter confirming your cancellation after an initial phone conversation.
- Write down confirmation numbers: When you speak with the insurance representative, write down the representative’s name and the cancellation confirmation number, if applicable. This information is important in the event that any administrative errors occur during the process.
- Ask about a refund on pre-payments: If you paid in full for a one-year policy and you want to cancel it before the policy ends, ask the insurance representative if you can be reimbursed for the remaining months. Many companies will refund you for the time left on your policy.
- Before purchasing a new policy Do not cancel your old policy until you have secured a new policy and reviewed the coverage. At the same time, make sure the coverage periods do not overlap. You cannot legally submit claims to two different major medical policies. Does your employer reimburse you for medical expenses through a health reimbursement arrangement (HRA)? If so, make sure you know the amount of allowance they provide, as this amount may impact your purchase decisions.
- Know your rights: Each state provides important consumer protections through state law. These may include: the appeal of coverage decisions within the insurance company, the appeal of coverage decisions to an impartial external reviewer, prompt payment of claims, access to certain specialists and healthcare providers, and coverage of specific treatments and services. Every state has an insurance department that is ready to help you with any question or complaint you may have about your coverage. To find out more, contact your state insurance department.
- Work with an insurance professional: An insurance agent or broker can be a helpful resource in canceling your policy and selecting a new policy to purchase. They can often handle most of the steps we just described for you.
Looking for information on canceling a group health insurance policy? Download our How to cancel group health insurance toolkit to get everything you need to help you on your transition.