We've looked at ways insurers can cherry-pick for healthier customers, and more specifically, how they might still be able to do so with pre-existing conditions. Today, let's check out rescissions, the means by which insurers drop customers.
‘SEC. 2712. PROHIBITION ON RESCISSIONS.
‘A group health plan and a health insurance issuer offering group or individual health insurance 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).
It's all going to boil down to how "fraud" and "intentional misrepresentation of material fact" are going to be interpreted in the regs written for this bill. Because insurance companies have been using "fraud" as the means for cutting people off for a long time. Remember the horror stories from the House hearings last summer?
"It's about the money," said Jennifer Wittney Horton, a Los Angeles woman whose policy was rescinded after failure to report a weight-loss medication she was no longer taking and irregular menstruation....
A Texas nurse said she lost her coverage, after she was diagnosed with aggressive breast cancer, for failing to disclose a visit to a dermatologist for acne.
The sister of an Illinois man who died of lymphoma said his policy was rescinded for the failure to report a possible aneurysm and gallstones that his physician noted in his chart but did not discuss with him.
Here's why the regulations on this particular issue have to be not just water-tight, but actually enforced. This happened at the same hearing:
Late in the hearing, Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show "intentional fraud."
The answer from all three executives:
"No."
The bottom line for insurance companies will always be the bottom line. We don't want insurance company lawyers defining "intentional fraud."