Insurance companies denied policies to 1 of every 7 applicants, probe finds

Oct 14 2010

The Wall Street Journal: The four largest for-profit health insurers in the U.S. -- Aetna Inc., Humana Inc., UnitedHealth Group Inc., and WellPoint Inc. -- "on average denied policies to one out of every seven applicants based on their prior medical history," according to a congressional investigative report released yesterday by Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, and Rep. Bart Stupak (D-Mich.). The carriers collectively denied coverage to more than 651,000 people from 2007 to 2009 due to pre-existing conditions. "While most Americans have coverage through their employer or Medicare, an estimated 15.7 million adults under age 65 received coverage through an individual policy as of 2008, the congressional report said. Those are the customers who can be denied coverage because they have a past illness." Under the new healthcare reform law, insurers will no longer be able to deny coverage on the basis of pre-existing conditions beginning in 2014 (Adamy, 10/13).

Bloomberg: "Insurers agreed to end denials for pre-existing conditions early in the health-care debate last year, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the industry's trade group in Washington. Until all consumers are required to buy health insurance, the coverage restrictions are needed to keep people from gaming the system, he said. 'In the current individual market, applicants undergo an underwriting process to discourage people from purchasing coverage only after they need medical services, which drives up costs for all policyholders,' Zirkelbach said" (Armstrong and Nussbaum, 10/12).

Reuters/MSNBC: "Coverage denials of individuals based on their medical histories by the nation's top for-profit health insurance companies rose by nearly half in recent years, U.S. lawmakers said Tuesday. ... Health care reforms passed earlier this year would make it illegal to deny insurance based on such so-called 'preexisting conditions,' but so far it only protects children. Insurers do not have to change their practices for adults until 2014. Additionally, the committee said the four insurers all considered pregnancy a preexisting condition to trigger automatic denial for a plan" (Heavey, 10/12).