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Wednesday, April 14, 2010

No more insurance company abuses!

Insurance company abuses have been a central part of the debate on health reform-they represent some of the worst parts of our current health care system. The policy to drop people from coverage when they get sick or even to retroactively revoke their coverage, called rescission, is especially troublesome and goes against the very nature of health insurance.

Rescission is the practice of denying coverage for a procedure, surgery, or other medical care after the fact and cutting coverage completely, due to alleged fraud or misrepresentation on the part of the policyholder. These policyholders are people who have been paying their premiums every month under the assumption that their insurance will be there when they need it. This practice has become commonplace for insurance companies who use it as a way to avoid paying claims. Often, the alleged misrepresentation is as simple as an unintentional mistake on the insurance application. According to an investigation by the House Subcommittee on Oversight and Investigations (as reported by the LA Times,) three health insurers (WellPoint Inc., UnitedHealth Group, and Assurant Inc.)

"cancelled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period."

And that's only three companies! This despicable insurance company practice affects thousands of people every year. The investigation went on to reveal some of the reasons that these policyholders were dropped.

"A Texas nurse said she lost her coverage, after she was diagnosed with aggressive breast cancer, for failing to disclose a visit to the dermatologist for acne."

"The sister of an Illinois man who died of lymphoma said his policy was rescinded for the failure to report a possible aneurysm and gallstones that his physician noted in his chart but did not discuss with him."

These are not people who willfully committed fraud against their insurer; they are people whose insurance companies saw an opportunity to avoid responsibility and took it. These companies specifically target policyholders with expensive conditions and praise their employees for the number of policies they rescind. And when asked if they would stop rescinding policies except where they could show intentional fraud, the three executives said no. With that kind of cooperation from insurers, the government has a responsibility to step in on behalf of consumers-and that's just what health reform did.

The new health reform law bars companies from rescinding policies except in cases where policyholders actually committed fraud or intentionally misrepresented a "material fact" in order to get coverage. That means companies will no longer be able to avoid paying for claims based on technicalities. Companies are also required to give prior notice of rescissions, which will give consumers have time to appeal the decision if they feel their coverage has been wrongfully terminated. The abuses of the past will no longer be tolerated. From now on, consumers can rest assured that their insurance will be there when they need it the most.