Health plan rescissions under fire in reform talks

Over the past year or two, we've told you some pretty colorful stories about the practice of rescission, under which health plans cancel active coverage on the premise that patients lied about pre-existing conditions on their application.

California regulators, in particular, have been in a pitched battle with the state's health plans over the issue, and one plan lost a significant court battle when a woman with cancer won $9 million from Health Net after it canceled her insurance once she started incurring big bills. In the past 18 months, California's biggest five health plans have paid almost $19 million in fines over rescinding policies held by sick beneficiaries, according to The Washington Post.

Insurance companies, of course, defend the practice as a necessary fraud control measure, but that hasn't mollified opponents one bit.
Now, it looks like unhappiness with the practice is leaking into the general consciousness, and at least indirectly, into health reform talks. As some readers may have noticed, health plans are increasingly being cast as "the bad guys" in reform discussions on The Hill, something that may have resulted in part from publicity generated by high-profile rescission cases, observers suggested.

Federal legislators are discussing including provisions in health reform bills that would bar health plans from screening for pre-existing conditions. While the insurers could, in turn, slap other onerous requirements on policies--such as heavy preauthorization requirements for services that people at risk might need--this would stop the rescission practice cold, observers note.

To learn more about this issue:
- read this piece from The Washington Post

Related Articles:
Health plan industry addressing policy cancellations
Los Angeles sues Health Net over cancellations
Kaiser forced to reinstate coverage
California considers regs to reduce policy of rescissions