The Risk Behind Intentionally Omitting Information in Health Insurance Forms
A prospective insured completes and signs an application for health insurance but intentionally withholds or falsifies information. This isn’t just a mistake—it’s fraud. While many people think insurance companies won’t verify every detail, the consequences of such actions can be severe. From claim denials to legal action, knowingly hiding facts during the application process opens the door to serious repercussions.
Let’s break down what happens when someone lies or hides the truth on a health insurance application and what laws and consequences support insurer actions.
What Counts as Intentional Misrepresentation?
Intentional misrepresentation refers to any deliberate act to deceive the insurer while filling out an application. This may include:
- Hiding pre-existing conditions
- Understanding age or smoking habits
- Providing false income or employment details
- Falsifying address or dependent status
Even leaving out seemingly minor details can count as fraud if it influences underwriting decisions.
How Insurance Companies Detect Fraud
Insurers have strict verification processes. Once a claim is submitted—especially a large one—investigations often begin. They review:
- Past medical records
- Hospital histories
- Pharmacy data
- Third-party health checks
If discrepancies are found between your application and these data sources, the insurer can take immediate action.
According to Healthcare.gov, the government marketplace and private insurers routinely verify the information provided in your application before finalizing enrollment or processing major claims.
Legal Grounds for Denying Coverage or Cancelling Policies
When an insurer discovers intentional falsehoods, it can:
- Deny the specific claim
- Cancel the entire policy retroactively (known as rescission)
- Refuse future coverage
- Report the matter to legal authorities
These actions are supported under misrepresentation clauses common in health insurance contracts. The insurer must show that the false information was material—that is, it impacted the decision to provide coverage or calculate risk.
Case Example: Misrepresentation Can Void Your Policy
Imagine someone applies for health insurance but intentionally fails to disclose a recent diabetes diagnosis. A year later, they file a claim for complications related to that same condition. During review, the insurer uncovers the omission. The result? The entire policy is rescinded, and the insured is left with unpaid medical bills—and possibly legal trouble.
This scenario isn’t hypothetical. Courts have upheld insurer rights to deny claims or rescind coverage when fraud or misrepresentation is proven. Legal publications like Cornell Law School’s overview of fraud in insurance support these actions as long as the omission is material.
What Should You Do Instead?
Honesty is always the best policy when it comes to insurance. Here’s what applicants should do:
- Disclose all known health conditions
- Answer questions truthfully, even if uncomfortable
- Ask for clarification if you’re unsure how to answer
- Request a copy of your submitted application
If you’re ever caught hiding the truth, it’s not just your coverage at risk—it could be your financial future.
The Insurance Company’s Responsibility
Insurers must also act fairly. If an applicant unintentionally provides incorrect info and it wasn’t material to the policy decision, insurers may still be obligated to honor coverage. This is why insurers differentiate between fraud, material misrepresentation, and innocent mistakes.
They’re also bound to review applications thoroughly during the contestability period—typically the first 1-2 years. After that, the policy becomes incontestable unless fraud is proven.
Short-Term Gain, Long-Term Risk
If a prospective insured completes and signs an application for health insurance but intentionally omits information, they risk far more than just denial of claims. From canceled policies to criminal fraud charges, the dangers are real and legally justified.
Being truthful not only ensures your coverage works when you need it—it also protects you from financial ruin and legal exposure. For more information, visit Healthcare.gov’s fraud prevention section.