Arizona Health Insurance Practice Exam

Which of the following is NOT a valid reason for an insurer to refuse renewal of a health insurance policy?

1. The insured is in poor health

2. The insured has failed to pay premiums

3. The insured did not provide required documentation

4. The insured has filed multiple claims

The correct answer is: The insured is in poor health

An insurer cannot refuse to renew a health insurance policy simply because the insured is in poor health. The Affordable Care Act (ACA) has provisions that prevent health insurers from denying coverage or refusing renewal based on an individual's health status or medical history. This means that factors such as pre-existing conditions or current health problems cannot be used as a reason for non-renewal, ensuring that coverage remains available to individuals regardless of their health circumstances. In contrast, failing to pay premiums, not providing required documentation, or filing multiple claims can be legitimate reasons for an insurer to refuse renewal. Premium payment is a fundamental requirement for maintaining coverage; failure to pay can lead to a lapse in the policy. Similarly, if an insured does not provide necessary documentation essential for maintaining coverage, the insurer may not be able to assess risk or verify eligibility. Lastly, while filing multiple claims might indicate a pattern that concerns the insurer, it can be a valid reason for not renewing the policy, as it can affect the insurer's risk assessment.