Rescission

RESCISSION…. Imagine what the health care reform debate would be like right now if discussion over “rescissions” were as common as talk about non-existent “death panels.”

The subject came up a bit in June, but it’s still largely an afterthought in the larger debate. With that in mind, it was encouraging to see a front-page piece on the subject in the Washington Post today.

Rescission — the technical term for canceling coverage on grounds that the company was misled — is often considered among the most offensive practices in an insurance industry that already suffers from a distinct lack of popularity among the American public. Tales of cancellations have fueled outrage among regulators, analysts, doctors and, not least, plaintiffs’ lawyers, who describe insurers as too eager to shed patients to widen profits. […]

In a pending case, Blue Shield searched in vain for an inconsistency in the health records of the wife of a dairy farmer after she filed a claim for emergency gallbladder surgery, according to attorneys for the family. Turning to her husband’s questionnaire, the company discovered he had not mentioned his high cholesterol and dropped them both. Blue Shield officials said they would not comment on a pending case.

Officials from three insurance companies told a House Energy and Commerce subcommittee this summer they had saved $300 million by canceling about 20,000 policies over five years.

For all the talk about protecting private insurers from competition, and sympathy for the private, patchwork system, the surest way to characterize insurers as an obstacle for quality, affordable care is to remind consumers that these companies have a nasty habit. When customers get sick and need their coverage, private insurers frequently look for an excuse to drop the coverage under “rescission.”

In one of the more infamous examples, a woman in Texas was diagnosed with aggressive breast cancer. Soon after, her insurer dropped her — the company found an instance in which she visited a dermatologist for acne, and didn’t tell the insurer about it. “Rescission” at work.

Three months ago, the House Subcommittee on Oversight and Investigation held a hearing on this with executives from three of the nation’s largest health insurers, WellPoint Inc., UnitedHealth Group, and Assurant Inc. At one point, late in the discussion, Rep. Bart Stupak (D-Mich.) asked each of the execs whether they would at least commit to stopping rescissions except where they could show “intentional fraud.” All three responded with the same answer: “No.” They liked the money-saving tactic and planned to keep using it.

That conservative activists would fight to protect these companies, while fearing government protections, is amazing.