It’s True! Health Insurers Tell Congress They Cancel Policies of Sick Patients

by admin on July 7, 2009

It always seems like a myth that Insurance Carriers can drop your coverage and always at the worst time, but its not as more and more people are finding out the hard way.

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For years, Americans have heard news stories about the sick patient whose health insurance policy was rescinded in the midst of a health crisis. Now comes public acknowledgement—at a Congressional hearing no less—that this business practice exists!

Executives from three of the nation’s largest health insurers admitted to this practice when testifying at a Congressional investigation recently. Observers believe the surprisingly candid acknowledgement about health insurance recissions pretty much guarantees insurers will be excluded from the health care reform debate. It may even ensure inclusion of a government health insurance plan in the final legislation which passes.

The House Subcommittee on Oversight and Investigations was investigating the common practice by insurance companies’s of rescinding health insurance policies. This hearing was triggered by news reports published by the Los Angeles Times indicating that, over the past five years, the health insurance policies of 20,000 people were denied because of these controversial rescission policies. The recissions directly saved the health insurance companies $300 million, while burdening patients who thought they had valid health insurance with those medical bills.

According to the Los Angeles Times report, the insurance executives contended that rescission policies are used to terminate people who lie on their applications to get coverage. Brian Sassi, President of Consumer Business for WellPoint Inc, the nation’s largest insurance company, told the committee: “I want to emphasize that rescission is about stopping fraud and material misrepresentations that contribute to spiraling healthcare costs.”

Other executives testifying were Richard A. Collins, CEO of UnitedHealth’s Golden Rule Insurance Co., and Don Hamm, CEO of Assurant Health.

Patient testimony at the congressional hearing told a different story. Patients revealed that, time after time, insurance companies dropped people for technicalities, honest mistakes, or inadvertent omissions.

For example, because a Texas nurse failed to disclose a visit to the dermatologist for acne, her insurance coverage was dropped when she was diagnosed with breast cancer. A Los Angeles woman was dropped for failing to report a weight-loss medication she no longer takes and because of irregular menstruation.

To the utter amazement of the congressional committee, the health insurance executives refused to commit to limiting rescission to only policyholders who intentionally lie or commit fraud.

The committee discovered that health insurers target up to 1,400 expensive conditions or illnesses. These include breast cancer, high blood pressure, lymphoma and pregnancy. It was also revealed that employees at these health insurers are rated in performance reviews for high-dollar rescissions.

Both democrats and republicans condemned these practices. Rep Michael C. Burgess (R-Tex.), said, “No one can defend, and I certainly cannot defend, the practice of canceling coverage after the fact.” Rep. John Dingell (D-Mich.) added, “This is precisely why we need a public [insurance plan] option.”

During the congressional hearing, it wasn’t so much the rescission policies that made elected officials on both sides of the aisle see red, as much as the lack of apology and the matter-of-fact arrogance displayed by the health insurance executives. Recission of health policies when someone gets sick is a policy which offends Americans’ sensibility about fair play.

Disclosure of the rescission policy was brought to light three years ago by the Los Angeles Times. Since then Californians have been up in arms over it. In early June, California Insurance Commissioner Steve Poizner announced his proposal to combat the practice of rescission.

The proposal calls for health insurers to write applications in plain English and allows applicants a “not sure” response for questions about pre-existing conditions. Insurers would be barred from dropping policyholders if companies fail to thoroughly investigate an applicant’s medical history before issuing a policy.

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When I have a client ready to complete an Application for Health Insurance (as well as all other Insurance application), I make it very clear they should always disclose everything. The end result in not could be much worse then a 25% rate increase. Health Insurance Carriers will find out your entire medical history in the case when you become very ill.

Source: www.darkdaily.com

Questions Please Call Politi Insurance Agents & Brokers

818-709-8442

www.health-insurancecalifornia.com

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