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Health plan industry addressing policy cancellations

February 28, 2008 — 7:59am ET
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Hoping to get some control of a situation that is rapidly deteriorating into a series of regulatory fines, lawsuits and heinously bad PR, the health-insurance industry is mounting an initiative to deal with the issue of retroactive policy cancellations. Industry group America's Health Insurance Plans has begun pushing state regulators to adopt a draft bill giving consumers the right to appeal rescissions to an external panel. Decisions by the panel, which would be composed of independent healthcare professionals and lawyers, would be binding on all parties. Meanwhile, some individual insurance companies, such as Blue Cross of California, are preparing to roll out their own independent review programs.

The initiative comes in the wake of several legal actions that have slapped health plans engaging in these cancellations. Last week, for example, a California judge awarded $9.4 million to a hairdresser whose medical coverage was canceled by Health Net while she was being treated for breast cancer. Health Net also faces a suit filed against it by the Los Angeles city attorney, who contends that the plan engaged in a concerted campaign to cancel patients' policies when they became ill. 

To learn more about the health insurance industry's plans:
- read this piece from The Wall Street Journal

Related Articles:
L.A. sues Health Net over cancellations. Report
Health Net set goals, bonuses based on policy cancellations. Report
CA regulators plan limits to health policy cancellations. Report
BC of California fined $1 million for cancellations. Report
CA agency mulls review of policy cancellations. Report
Kaiser forced to reinstate coverage. Report
Blue Cross of California settles plan-cancellation suits. Report
Kaiser pushes for policy cancellation rules. Report

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Comments

By A Carroll | Posted 1:34pm | February 28, 2008

You could die waiting (and many have)! Leave it to the insurers to come at this problem by forcing patients and regulators to swat at them like annoying mosquitos and allowing insurers to still be in the catbird seat (mixed metaphors?).

The ROOT of the problem is individual policies!! They are much more lucrative than group policies, which are usually negotiated and spread out risk. The many cases of individual coverage gone wild, including out-of-control rises in prices for premiums, the ability to cancel coverage arbitrarily or not pay for covered claims, and individual patients not having the clout to counter these actions, are the evidence. AHIP LOVES state "reforms" that mandate uninsured people to buy individual policies.

The answer to the problems in this article is single-payer coverage (which is essentially group coverage, like Medicare, the VA, the military, the FEBHP, and all the other group health plans that the American taxpayer is already paying for). In the absence of single-payer national health insurance (which we are already paying for to the tune of 60% of the $2 trillion annual healthcare expenditure), at the very least, regulations should mandate GROUP plans and GROUP coverage, and eliminate individual healthcare insurance forever.

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