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Wednesday, June 17, 2009  

Health Insurance Companies and Rescission

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It was the industry's dirty little secret until three years ago, but it appears that even now some health insurance companies refuse to part ways with the practice of rescission.

Rescission is the controversial practice in which health insurance companies find ways to cancel the insurance policies of individuals who become sick. They say that it's done to prevent fraud, and that the goal is to cancel the policies of individuals who lie on their applications about pre-existing conditions.

But the LA Times discovered that this wasn't the case. In fact, many health insurance companies had canceled the policies of people for what they claim were honest mistakes on their applications.

For example, the woman whose policy was canceled once she was diagnosed with breast cancer because she hadn't disclosed an appointment with her dermatologist for acne.

Or the man with lymphoma who lost his coverage after he failed to disclose a potential medical condition that his doctor had noted in his chart, but never mentioned to him.

Health insurance companies UnitedHealth, Assurant Health, and WellPoint Inc. admit that falsely canceling policies is a terrible practice.

But, when put on the spot, none of them agreed to cancel rescission as a company-wide policy.

Democrats and Republicans alike criticized the health insurance companies and their officials for such practices, and reiterated that this is exactly why we need a major overhaul for our health care system in America.

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