What is a categorical exclusion?

A categorical exclusion is a term used in North Carolina health insurance law. It is a type of exception to specific requirements for different types of health insurance coverage. When an exclusion is in place, it means that the coverage is not required for certain conditions or services. This could include conditions or treatments that are considered to be too costly, too risky, or not medically necessary. Some common examples of such conditions or services that may be excluded from health insurance coverage include mental health treatments, experimental treatments, and preventive screenings. In order for a categorical exclusion to be valid, the insurer must prove that it serves a legitimate purpose that is in the best interests of the insured. This could include that the exclusion is necessary to contain the price of insurance and ensure that basic coverage is available to those who need it most. Insurers may also use categorical exclusions to deny coverage for certain activities that are considered to be too risky, such as riding a motorcycle without a helmet. Exclusions may also be used to deny coverage for services that fall outside the scope of the plan, such as certain cosmetic procedures. The insurer must provide a clear explanation for why it is using a categorical exclusion and how the exclusion serves the interests of the insured.

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