Insurers refuse to stop cancelling some sick patients' policies

Jun 18 2009

Members of Congress grilled executives from the insurance industry's big three - UnitedHealth Group, WellPoint, and Assurant - for canceling coverage of more than 20,000 paying policy holders at a hearing Tuesday, the Los Angeles Times reports.

The executives responded that they would continue the practice, known as rescission, which has saved them an estimated $300 million over a five-year period.

The House Subcommittee on Oversight and Investigations 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." One executive said rescission is intended to stop fraud and abuse.

The Times reports that the executives "would not commit to limiting rescissions to only policyholders who intentionally lie or commit fraud to obtain coverage, a refusal that met with dismay from legislators on both sides of the political aisle. Experts said it could undermine the industry's efforts to influence healthcare-overhaul plans working their way toward the White House. 'Talk about tone deaf,' said Robert Laszewski, a former health insurance executive who now counsels companies as a consultant ... Proponents of a public plan seized upon the hearing, saying it showed why access to healthcare cannot be left to private insurance companies" (Girion, 6/17).