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View Diary: Go Sebelius! UnitedHealth to stop dropping policies of sick! (58 comments)

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    They're just saying they'll stop rescinding policies unless there's fraud or material misrepresentation, which actually was the existing law before the passage of this health bill.

    I know varying State Laws--California specifically had one--regarding rescission policies... but what federal law prior to the one we just passed made rescission illegal before the passage of PPACA?

    You're saying that PPACA literally changes nothing vis-a-vis rescission law?

    •  I refer you to this (1+ / 0-)
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      The problem, however, is that the new law still allows what WellPoint has argued it did in these cases--rescind policies because of "fraud or intentional misrepresentation of material fact," as Sebelius points out in her letter. Sebelius should be taking this story very seriously, and recognize the potential still existing under the new law for a broad interpretation on the part of insurers for "fraud and intentional misrepresentation." This is an area HHS needs to pay particular attention to in crafting the regulations for the law to find any possible way in which they can tighten up potential loopholes and make the law enforcable as it was intended.

      And this is the kind of stuff that will still go on:


      That's not really a ban on rescissions. "Fraud and intentional misrepresentation of material fact" are precisely the excuses that the insurance companies are using when rescinding policies. Does the Senate actually believe that the insurance companies are telling people that their policy is rescinded because the got sick? No way.

      They always claim that it's due to fraud or misrepresentations. For example, one of the many horror stories involves a woman's policy being rescinded because she didn't report a prior case of acne. Her insurance company interpreted this as fraud and rescinded the policy. Fraud! The ban on rescissions is supposed to prevent this.

      A federal law passed in 1996 bans rescission except in cases of fraud. But the law goes unenforced because there's no regulation at the federal level and nearly all states have much weaker laws on rescission, says Pollitz.

      That would be HIPAA.

      The Health Insurance Portability and Accountability Act (HIPAA) of 1996 (P.L.104-191)

      Join Our Countdown To Health Reform! Project I work with Progressive Congress Action Fund, a 501(c)4.

      by slinkerwink on Wed Apr 28, 2010 at 01:58:57 PM PDT

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