Health insurers refuse to limit rescission of coverage

[blue note]

Health insurers refuse to limit rescission of coverage

Full article at LA Times

Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.

The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system.

An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled 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.

It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.

"No one can defend, and I certainly cannot defend, the practice of canceling coverage after the fact," said Rep. Michael C. Burgess (R-Tex.), a member of the committee. "There is no acceptable minimum to denying coverage after the fact."

Rescission was largely hidden until three years ago, when The Times launched a series of stories disclosing that insurers routinely canceled the medical coverage of individual policyholders who required expensive medical care.

Sassi said rescissions are necessary to prevent people who lie about preexisting conditions from obtaining coverage and driving up costs for others.

"I want to emphasize that rescission is about stopping fraud and material misrepresentations that contribute to spiraling healthcare costs," Sassi told the committee.

But rescission victims testified that their policies were canceled for inadvertent omissions or honest mistakes about medical history on their applications. Rescission, they said, was about improving corporate profits rather than rooting out fraud.

"It's about the money," said Jennifer Wittney Horton, a Los Angeles woman whose policy was rescinded after failure to report a weight-loss medication she was no longer taking and irregular menstruation.

"Insurers ignore the law, and when they find a discrepancy or omission, they rescind the policy and refuse to pay any of your medical bills -- even for routine treatment or treatment they previously authorized," Horton said.

She and others from around the country accused insurers in testimony of gaming anti-fraud laws to take policyholders' premiums, only to drop people who developed serious illnesses. They testified that they or a deceased loved one had had policies canceled over innocent mistakes and inadvertent omissions on their applications.

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

The committee's investigation found that WellPoint's Blue Cross targeted individuals with more than 1,400 conditions, including breast cancer, lymphoma, pregnancy and high blood pressure. And the committee obtained documents that showed Blue Cross supervisors praised employees in performance reviews for rescinding policies.

One employee, for instance, received a perfect 5 for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.

Late in the hearing, Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show "intentional fraud."

The answer from all three executives:

"No."

Rep. John Dingell (D-Mich.) said that a public insurance plan should be a part of any overhaul because it would force private companies to treat consumers fairly or risk losing them.

"This is precisely why we need a public option," Dingell said.

Proponents of a public plan seized upon the hearing, saying it showed why access to healthcare cannot be left to private insurance companies.

"This could reshape the debate," said Jerry Flanagan, a patient advocate with Santa Monica-based Consumer Watchdog.

"When insurance companies go under oath and admit they are canceling innocent patients when they get sick, it makes it very difficult for lawmakers to pass a law that requires every American to buy a policy or face a tax fine. It opens the way for a public option to hold the companies in check."

Rescission has fueled consumer outrage, particularly in California, where lawmakers are considering legislation to limit the practice to cases of intentional misrepresentation. It has also led to a flurry of lawsuits.

[GCTMT]

This is bothersome. I don't like what I have been hearing lately from Washington regarding health care reform. Obviously it's too early to speculate because the Congress hasn't produced legislation, but I'd like to know exactly what kind of rules these health insurance companies will be required to observe, considering the prospect of doing away with them completely is "off the table".

[UKRNinUSA, RN]

If we maintain the current mix of private/public insurance (altho personally I'm for single payer) I think that private insurers should be required to be not-for-profit as in Germany and Japan. Apparently these insurance companies compete on the basis of quality (not cost).

[RN4MERCY]

We don't have a healthcare system in this country, we have a healthcare industry that's designed to avoid and/or take advantage of sick people. Shamefully, the United States has one of the most discriminatory health systems in the developed world – in terms of financing, in terms of access to care, and in terms of outcomes.

There are only two paths to healthcare reform:

1) Preserve the role of private, for profit "health" insurance companies together with their weapons of mass destruction-copays, deductibles, exclusions, and recissions.

OR

2) Create a national, publicly accountable single payer "Medicare for All" health care system.

[blue note]

More stories of people getting screwed by the health insurance companies from Bob Cesca's blog. These were mostly in response to his article on HuffPost called "My Face Was Ripped Off" and Other Arguments for a Public Option.

The most egregious story has to be the one from a woman who was mauled by a bear, and had to undergo a 7-hour emergency surgery. And what did her insurance company, Blue Cross of California, do? In her words:

Although I've maintained a private individual health insurance policy with Blue Cross of California for thirty (30) years, they have, at every turn of my ordeal, tried to waffle, obfuscate, or outright deny me benefits for medical care. Because my injuries were mostly to my eyes, my facial structure (including my nose and most of my teeth,) and obviously, cosmetic appearance, my policy "does not cover services," for putting me back together, and demands 30% co-pays before they will pay for the hugely expensive ($300,000 and counting,) reconstructive surgeries I need to regain a degree of functionality.

I am, not surprisingly, disabled and unable to work. My assets and savings were exhausted long ago, (their deductable and co-pays reset every calendar year and my reassembly is a multi-year project.)

I always thought having a "good" insurance policy was not only my civic responsibility, but would cover my medical expenses should I ever face a catastrophic illness. But it turns out that Blue Cross's $2,500 deductable is actually more in the order of an $11,500 deductable before they kick in for 100% of what they deem "reasonable and customary" care. Even that determination is subjective and skewered in their favor.