Health Insurers End Rescission Practices Early
Health insurance companies have been under fire for cancelling policies after the insured becomes sick. Under this policy, called rescission, the companies would scour the application of the insured for any intentional or unintentional error and then use this as the basis to cancel coverage.
The health care reform legislation passed last month by Congress limits rescission to cases of fraud. But that provision won't take effect until Sept. 23. However, several health insurers, bowing to pressure from lawmakers, said last Wednesday they plan an early start to halting the policy.
UnitedHealth Group Inc., Humana Inc. and Blue Shield of California all said they will drop, or rescind, coverage only in cases where a patient has committed fraud or intentional misrepresentation.
UnitedHealth said it will limit its use of rescission immediately. Blue Shield plans to start in May, and Humana said it already restricts rescission to fraud cases. WellPoint Inc., said it will start following the guideline May 1.
A letter dated April 27 and signed by several House of Representatives committee chairs asked health insurance leaders to start limiting rescission immediately. The lawmakers also asked companies to start independent, third-party reviews of rescission cases.
WellPoint, Humana, UnitedHealth and other insurers also announced recently that they planned to get an early start on another reform provision that allows dependents to remain eligible for coverage under a parent's insurance until age 26. The reform also calls for that provision to start in September.
