Sleep Apnea
Greg Horak
November 2018

Over the last several years insurance companies have seen a sharp uptick in the number of applicants with a diagnosis of Obstructive Sleep Apnea or a suspicion of OSA noted in the proposed insured’s medical records.  Most advisors have heard of Obstructive Sleep Apnea and may even have a client, friend or relative who has it.  But many advisors don’t truly understand what Obstructive Sleep Apnea is, the pathophysiology of the condition, or how insurance companies underwrite individuals who have it.

Underwriting Obstructive Sleep Apnea is relatively simple and understanding the cause of sleep apnea, the process of diagnosing sleep apnea, and the treatment of sleep apnea can help expedite your client’s application and can help you quote the case accurately the first time so there are no surprises during the underwriting process.

What is Obstructive Sleep Apnea?
Obstructive Sleep Apnea (OSA) occurs when the upper airway becomes blocked repeatedly during sleep, reducing or completely stopping airflow.  

It’s estimated that as many as 18-22 million Americans have sleep apnea with a large percentage undiagnosed.  The primary risk-factors include obesity, a thick neck, being male, and cigarette use.

The most common negative effect of OSA is the sleep disturbance it causes.  When the body realizes that it’s not getting enough oxygen we wake up just enough that we start breathing again, therefore disturbing our natural sleep rhythms which are very important to overall health.   If OSA is severe enough, oxygen levels in the body can drop to dangerous levels and can cause damage to internal organs and even lead to sudden cardiac death.

Diagnosis and Testing
Now that we know what OSA is, how many individuals have it, and who among us is the most likely to develop it, it’s important to know how it’s diagnosed and treated.  The first step is very subjective and is usually as simple as the patient telling their personal physician that even though they’re getting a full night’s sleep, they still have excessive daytime fatigue.  This in and of itself isn’t enough to determine that someone has sleep apnea but, in today’s climate of defensive medicine, this will usually prompt a doctor to advise the patient to have a sleep study done.  Many doctors will also ask a patient to complete an Epworth Sleepiness Scale Questionnaire.  This questionnaire asks the patient to assign a number between zero and three indicating how likely they are to fall asleep while performing several activities.  These activities range in severity from something as benign as reading or watching TV to something as serious as driving a car.  The higher the score, the more likely the patient may have sleep apnea.

The next step is to have the patient do a sleep study.  Take-home tests are becoming more and more common as a screening tool.  A negative result on a take-home test will usually suffice for the patient’s doctor and for an underwriter that the individual doesn’t have sleep apnea.  But if the take-home test comes back positive, then an overnight sleep study (a polysomnography) is usually ordered by the patient’s physician. If this has been ordered and not completed, insurance carriers will usually postpone offering coverage until it is completed. 

The Polysomnography
Poly (many) somno (sleep) graphy (to write) is an overnight sleep study where several vital signs including heart-rate, oxygen saturation, brain activity, muscle activity, and eye movement are recorded to determine the severity of the patient’s sleep apnea and what treatment, if any, is needed.  The polysomnography is the gold standard for diagnosing and treating sleep apnea.

The underwriter will use two primary pieces of information from the polysomnography—the “AHI” and the “Oxygen Saturation Nadir.”  AHI stands for “Apnea-Hypopnea Index” which reflects the number of times per hour the patient either completely stops breathing (apnea) or their breathing is so slow and shallow that it affects oxygen supply to the lungs (hypopnea).  If the patient completely stops breathing 21 times per hour and their breathing is shallow enough to affect oxygen supply 16 times per hour, their AHI will be 37.  Oxygen Saturation Nadir is simply the lowest point that the patient’s oxygen level drops to while the patient was asleep.

Once we know the AHI and the Oxygen Saturation Nadir, we know how severe the patient’s sleep apnea is.  Below are the criteria many life insurance companies use to define mild, moderate, and severe sleep apnea.

  • Mild: AHI of 15 or less and oxygen saturation remains over 80 percent throughout the study.
  • Moderate: AHI between 15 and 30 and the oxygen saturation falls below 80 percent during sleep but returns to baseline upon arousal.
  • Severe: AHI greater than 30 and the Oxygen Saturation falls below 60 percent.  

This is really the extent of how the underwriter at the insurance company determines the severity of a client’s sleep apnea.  This, however, is not how the final rating for sleep apnea is determined by the insurance company.  Just like other medical conditions like high cholesterol, high blood pressure, and diabetes, the success or failure of treatment is the primary driver of the final underwriting decision.  Two individuals with identical pre-treatment polysomnography results could receive drastically different underwriting offers.  One could be denied life insurance while the other could get a standard or better offer depending on the success or failure of their treatment.

Treatment
The polysomnography isn’t just a diagnostic test.  It’s also used to determine the best course of treatment.  After the diagnostic portion of the test is complete (usually a few hours through the night, but sometimes on a totally different night), the patient is awakened and a c-pap machine is used for the rest of the night.  The c-pap machine is the primary treatment tool for sleep apnea.  It continuously blows pressurized air through the airway, which prevents the airway from collapsing during sleep.  (There are other devices like the c-pap machine—a-pap, bi-pap, etc.—but for simplicity’s sake, when I refer to c-pap during the rest of this article, all statements could also apply to these other devices.)  Once the patient is back asleep, the pressure setting on the c-pap machine is slowly increased by the technician until an ideal pressure is determined that brings the AHI down to a normal range and the Oxygen Saturation Percentage up to a normal range.  After this is determined, the test is over.  

The patient is then prescribed a c-pap machine. If the AHI and oxygen saturation levels are back into what the insurance company considers “mild sleep apnea” (AHI <15 and Ox Sat >80 percent), standard offers, or even better, are usually possible after 24 months of the patient using the c-pap machine.  I’ll speak later about the reason for this 24-month waiting period.

The final underwrirting decision made by the insurance company will be based on a) the patient’s AHI and oxygen saturation level at this optimal pressure setting of the c-pap machine,  and, b) the patient’s ability to tolerate the c-pap machine and compliance of use.  I’ll expand on this second issue a little later in this article but regarding the first issue an example will help to illustrate this:

If a 45-year-old man is diagnosed with severe sleep apnea (AHI of 43 and Oxygen Saturation Nadir of 78 percent) and is prescribed a c-pap machine which he’s able to tolerate and uses every night from the time he goes to bed to the time he wakes up in the morning, and his AHI drops to four and his Oxygen Saturation Nadir using the machine is 93 percent, he could easily get standard rates or better once he’s been using the c-pap for 24 months.  During this first 24 months, however, there would still very likely be a small table rating.

If, on the other hand, his AHI only drops to 26 and/or his oxygen saturation still drops below 80 percent while he’s using the c-pap machine, he would still be table rated even after the 24-month mark.  This is because his treated AHI and Ox Sat Nadir are still in the moderate range.

Underwriting Tools
The Sleep Study Report (polysomnography) is the primary tool that underwriters use to determine the severity of an individual’s sleep apnea and to determine how well-controlled it is while using the c-pap machine.  Another term for the Sleep Study is a Split-Night Polysomnography.  This is referring to the split results; the first being the diagnostic results and the second being the set of results that show his response to wearing the c-pap machine.  Sometimes the first part is done one night, and the patient comes back into the sleep lab on an entirely different day to do the second part of the test when they wear the c-pap machine.

Another tool that the underwriter uses is the data report that’s obtained from the c-pap machine.  Some machines send this report via Wi-Fi to the patient’s primary physician.  Some machines have a data card similar to the data card in a digital camera.  The patient can take this data card with them to their physician and the doctor can download information.  One of the most important pieces of information is time of use.  If the insurance company has doubts that the proposed insured is using the machine, we can get a report that tells us how many days of the week the patient is using the machine and how many minutes per night they’re using it.  It also records the number of apneas and hypopneas the proposed insured is experiencing while using the machine and whether the air pressure needs to be adjusted.  

Doctor’s notes are also a helpful tool for the underwriter.  Many times the client’s doctor doesn’t make a lot of useful notes, but if the doctor does indicate that the patient is using their c-pap machine as prescribed this is usually good enough for the underwriter and they won’t have to burden the proposed insured with obtaining a copy of the machine’s data report.  If you know the patient will be applying for insurance and they have an upcoming visit with their doctor, it’s helpful if they ask their doctor to affirmatively note in their records that the patient is using their c-pap machine as prescribed.  This will help expedite underwriting.

Underwriting Pitfalls
There are a few pitfalls that can cause problems with underwriting sleep apnea.  The first is the lack of verification of c-pap use.  This can delay cases and occasionally, if the proposed insured’s sleep apnea is severe enough, can cause outright declines. 

Another very common problem with underwiring sleep apnea is non-compliance.  Many times the proposed insured just can’t tolerate the c-pap machine and they tell us this up-front.  C-pap machines are bulky,  loud and difficult to get used to while sleeping.  Some studies estimate that as many as 50 percent of patients are never able to tolerate the machine.  This doesn’t mean they’ll be automatically declined for life insurance coverage, but it does mean that they’ll be underwritten based on their untreated AHI and oxygen saturation levels rather than on treated levels.  

The last pitfall we often see in our office includes cases where sleep apnea is suspected but a sleep study has never been performed or it was performed so long ago that we can’t get a copy of the report.  These are some of the most difficult cases we see as the underwriter has no objective data on which to base a decision.  Obtaining a statement from the proposed insured, which usually becomes an amendment with the policy, and/or information from the medical records or a letter from the proposed insured’s personal physician can many times help with these cases.  Information in these letters should include statements that the proposed insured doesn’t have symptoms like excessive daytime sleepiness, snoring, or a neck circumference more than 16 inches.   Another important indication is that the proposed insured’s spouse doesn’t witness apneas while sleeping. 

Obstructive Sleep Apnea, like other medical conditions where obesity is one of the primary risk factors, is becoming more and more common in the United States.  Understanding the risk factors, diagnostic factors, treatment options, and possible pitfalls in the underwriting process can help expedite an application and get your client the coverage they need at a cost they can afford.  Just like any medical condition, successful treatment and proof of compliance with that treatment are the keys to getting the most favorable underwriting offer possible.

Author's Bio
Greg Horak
has been the medical underwriter at LifePro Financial Services, Inc. since 1998 and has been in the financial services industry since 1996. He participates in underwriting symposiums and seminars multiple times each year and was an inaugural graduate of the SwissRe A.D.A.M. Program. Greg has helped hundreds of advisors across the country place millions of dollars in life target premium and hundreds of millions in death benefit. Greg can be reached by telephone at 888-543-3776 ext. 3266 or by email at ghorak@lifepro.com.















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