What is an exclusion clause?

An exclusion clause is a term in a health insurance policy that limits or restricts coverage of certain services. These clauses can be used to limit the amount of coverage provided for specific treatments, procedures, drugs, or medical items. In California, an exclusion clause can be enforced if it does not violate a state law or regulation and does not conflict with the language of the policy itself. For example, some insurers may exclude coverage for certain pre-existing conditions. In this case, the pre-existing condition would be considered an exclusion clause and the insurer would not have to provide any coverage or reimbursement for treatments related to that condition. Other common exclusion clauses can include coverage for cosmetic surgery, experimental treatments, or services provided out-of-network. If a policyholder feels that their insurer is unjustly denying coverage for a specific treatment, they can complain about the exclusion clause to the Department of Managed Health Care or the Department of Insurance. Both departments are responsible for enforcing California’s health insurance laws and can investigate any violation of the exclusion clause.

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