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Insurance Cancellation Questions Could Spread Beyond California

Discussion in 'Insurance Issues' started by Ellen, Jul 21, 2008.

  1. Ellen

    Ellen Senior Member

    Oct 22, 2005
    Capitol Hill Watch | House Committee To Investigate Health Insurance Policy Rescissions Nationwide - Kaisernetwork.org

    Health Blog : Insurance Cancellation Questions Could Spread Beyond California
    July 18, 2008, 12:41 pm
    Insurance Cancellation Questions Could Spread Beyond California

    Posted by Jacob Goldstein
    Today’s Health Blog jargon of the day is rescission, the insurance industry’s practice of revoking individual insurance policies because of health-related mistakes or omissions on the application for coverage.
    The companies say this is a key step for fighting fraud, but they’ve come under criticism in California by those who accuse them of going over applications with a fine-tooth comb after members who’ve been enrolled for a while get sick or injured and start submitting claims.
    [​IMG]Now it looks like the push-back against rescission may be spreading. Henry Waxman, a Democratic California Congressman, held a hearing on the subject yesterday and said his oversight committee plans to investigate the issue nationally.
    “I understand that insurance companies need to protect themselves from fraud,” Waxman said in his opening statement. But “insurers are using technicalities or trumped-up ‘misrepresentations’ to rescind policies after individuals get sick and accumulate hundreds of thousands of dollars in medical bills.”
    The health insurance industry supports third-party review, established by the states, for rescission decisions, Stephanie Kanwit, special counsel to the trade group America’s Health Insurance Plans, said at yesterday’s hearing.
    Kanwit said the practice is very rare. And, she said, collecting accurate information on applicants’ health history is essential for the insurance market to function. “When individuals wait until they are ill before purchasing health insurance, costs are increased for other policyholders who pay into the system on a regular basis,” she said.
    Meanwhile, back in California, the industry’s rescission problems are rolling on. The state’s Anthem Blue Cross and Blue Shield yesterday agreed to pay the state $13 million in fines and to offer new coverage to more than 2,200 Californians the companies dropped after they became ill, the Los Angeles Times reports. As part of the agreement the companies didn’t admit wrongdoing.
    And earlier this week, Los Angeles’ city attorney announced a lawsuit against Blue Shield over the rescission issue. The city attorney launched an investigation into the issue earlier this year, and has already filed lawsuits against a few other insurers.
    A Blue Shield spokesman told the LA Times the suit is “a cheap political stunt” that is “totally without merit.”

    Permalink | Trackback URL: http://blogs.wsj.com/health/2008/07...ons-could-spread-beyond-california/trackback/

    Comments include the one below: ....

    Iwas recently terminated beacuse i answered no to “have you ever been diagnosed with diabetes” My doctor never stated to me that I was diabetic but counseled me to watch my diet and to exercise becuase my blood sugar was approaching the diabetic range.
    Upon review of my med records blood work recored that my blood sugar was high enough to be call diabetic. I was canceled immediatly and all payments were returned to me. All medical bill s not paid are now up to me to pay. I have never been treated for diabetes, prescibed any medicine for diabetes. My file was reviewed after I was scanned for a lump on my testicle. The test was negative but I think the insurance company did not want to pay for cancer treatment. iam now uninsurable. Not because I can not afford it but because of the termination for falsifing on the application.
    Again I was never diagnosed as diabetic. My doctor says that because I am phsically active, exercise and have a sound diet, he does not view my condition as diabetic.

    Comment by JG - July 18, 2008 at 4:57 pm
    Last edited: Jul 21, 2008

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