Despite New Health Care Law, Health Insurers Still Try to Rescind Policies of the Sick

Last week, a Reuters investigation revealed that Wellpoint, the country’s largest health insurer, was dropping coverage for women after they developed breast cancer.

The guidelines of Obama’s new health care law, which prohibit this type of insurance malfeasance, do not take effect until September 23, 2010. So, what better time for Wellpoint to start cancelling policies – before the law becomes the law and after learning that some of its insureds have developed breast cancer. Healthcare reform aims to end this conduct, but it is most certainly bad faith for carriers to cancel coverage of its sickest insureds before it starts in September.

The practice of denying coverage for certain medical conditions, or cancelling a policy after an insured has been diagnosed with a disease, has been practiced by insurance companies for years. This practice, known as rescission, preys on the most vulnerable victims; those who have been recently diagnosed with a terrible illness. It is done so that the insurance company does not have to pay for their expensive health coverage.

It took a letter from three democratic congressmen to seven health insurance executives, including Wellpoint representatives, to stop this outrageous practice. Humana and UnitedHealth also recently agreed to stop dropping insureds after they develop severe illnesses.

Are insurance companies so greedy for profits that it takes a letter from Congress to stop them from this reprehensible conduct? And then, after the law is passed, they still continue to deny insureds their rightful benefits? And to routinely target breast cancer patients? I can’t think of something more despicable. Furthermore, Congress contacted four other major insurers-why haven’t they made the same pledge? Anthem Blue Cross has been mentioned specifically in articles involving this unconscionable practice. Where is its pledge?

While I do not find it surprising that insurance companies have routinely denied coverage for patients with breast cancer and HIV, I am somewhat surprised that these companies have flaunted the new law by singling out on some of the weakest members of our society. The expenses associated with these diseases are extraordinary. And – the bottom line for these companies is not the health of their clients but the health of their profits.

At least, beginning in September, it will be against the law for insurance companies to drop coverage of someone who gets sick. Under the new law, the only time a health insurer could cancel coverage is when an individual commits fraud. Only time will tell if insurers will actually end this practice. The section of the statute reads as follows:

SEC. 2712. PROHIBITION ON RESCISSIONS.
“A group health plan and a health insurance issuer offering group or individual health nsurance coverage shall not rescind such plan or coverage with respect to an enrollee once the enrollee is covered under such plan or coverage involved, except that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. Such plan or coverage may not be cancelled except with prior notice to the enrollee, and only as permitted under section 2702(c) or 2742(b).”

If you have been the victim of an insurance company cancellation or denial of your coverage, please contact the attorneys at Pogust, Braslow & Millrood. We are investigating claims involving individuals who were denied coverage or had their insurance cancelled by their insurance carriers.