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Health Insurers Agree Under Pressure to Stop Dropping Sick Customers

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Americans are already starting to see some positive benefits from health care reform. The new law requires health insurance companies, slated to start this September, to end the deplorable practice known as rescission: the dropping of policyholders when they get sick. But in recent days, insurers and their trade association have announced under pressure from Democrats and the Obama Administration that they will end rescissions immediately.

Health insurance companies moved quickly to end the practice after an investigative report by Reuters said that one of the nation’s biggest insurers, WellPoint, was targeting women with breast cancer for policy cancellation.

Health care reform enacted in March makes rescission illegal except in cases involving fraud or intentional misrepresentation, and it gave insurance companies six months to comply. Reuters reported on April 22, 2010 that WellPoint used computer algorithms to specifically target women with breast cancer for an investigation, with the intent of canceling their health care policies. The report set off a firestorm of bad publicity for WellPoint and the insurance industry.

Prior to the new “Affordable Care Act” insurers claimed policies were rescinded only when people misrepresented or lied about their health status or other important factors at the time of application. Rescissions were typically singled out for policyholders who purchased their policy on the individual market, not those who carry employer-based coverage. Health insurance companies had argued that rescission is an important tool in their arsenal to keep rates down for the rest of their customers by excluding people who failed to report pre-existing conditions.

However, the House Committee on Energy and Commerce conducted an investigation and hearings in 2009 to challenge those claims. They found thousands of troubling cases where the pre-existing conditions were trivial, unrelated to the claim, or not known to the patient.

In an April 22, 2010 letter to WellPoint, Health and Human Services Secretary Kathleen Sebelius urged the company to immediately stop the practice of rescinding coverage for patients who become ill.

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Under Health Care Reform, Health insurance is a must, but now you can easily find health insurance for $40 http://ow.ly/1AqF1

May 6, 2010 - 1:55am
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