House Committee Chairs Ask Insurers to Ban Rescissions Ahead of Health Reform Implementation

April 27, 2010

By Matthew Beck 202-225-8933

WASHINGTON, D.C. -- Committee and Subcommittee Chairs from the House Committees on Ways and Means, Energy and Commerce, and Education and Labor today sent a letter to the CEOs of seven insurance companies, most of whom last week announced they were allowing individuals up to age 26 to get coverage through their parents' health insurance, ahead of health reform legislation taking effect.

The letter urges the firms to end the practice of rescissions -- terminating an individual's coverage once he or she becomes sick -- except in cases of fraud or material misrepresentation.  The letter also asks that these insurers institute independent third-party review whenever a policy is to be rescinded or canceled.

The letter was signed by House Ways and Means Chair Sander M. Levin (D-MI), House Energy and Commerce Chair Henry A. Waxman (D-CA), House Education and Labor Chair George Miller (D-CA), House Ways and Means Health Subcommittee Chair Pete Stark (D-CA), House Energy and Commerce Health Subcommittee Chair Frank Pallone (D-NJ), House Energy and Commerce Oversight Subcommittee Chair Bart Stupak (D-MI), House Energy and Commerce Chairman Emeritus John D. Dingell (D-MI), and House Education and Labor Health Subcommittee Chair Robert Andrews (D-NJ).

The text of the letter appears below.  For a PDF of the letter, please visit: http://go.usa.gov/iPxx

 

April 27, 2010

Angela F. Braly Chair of the Board, President, Chief Executive Officer WellPoint Inc.   George C. Halvorson Chairman and Chief Executive Officer Kaiser Permanente   Don Hamm President and Chief Executive Officer Assurant Health   Stephen J. Hemsley President and Chief Executive Officer UnitedHealth Group Inc.   Michael B. McCallister President and Chief Executive Officer Humana Inc.   Scott P. Serota President and Chief Executive Officer Blue Cross Blue Shield Association   Ronald A. Williams Chairman and Chief Executive Officer Aetna Inc.  

Dear Madam and Sirs:

Last week, most of your companies announced plans to implement ahead of schedule the provision in the health reform law allowing individuals up to age 26 to obtain coverage through their parents' health insurance.  This step will help many bridge the gap between graduation and the effective date of this requirement.  This decision signals that you are willing to work to make health insurance more accessible and affordable.  We commend you for this step.

Also last week, Secretary Sebelius, reacting to recent media reports, wrote to Ms. Braly asking that WellPoint immediately end its efforts to rescind health insurance coverage except in cases of fraud or intentional misrepresentation of material fact.  These rescissions hurt patients who need coverage the most, such as women diagnosed with breast cancer.  We are writing to ask all of your companies to end any such abusive practices immediately.

In addition, to ensure that rescissions occur only in cases of fraud or intentional misrepresentation of material fact, we request that each of your companies immediately institute a policy of independent, external third party review.  Under such a procedure, no individual health insurance policy should be rescinded until the review confirms that fraud or material misrepresentation has in fact occurred.

Taking these actions now would be consistent with your earlier decision to implement consumer protections for individuals under 26 voluntarily and would further demonstrate a commitment to reliable coverage for your policyholders.

 

Sincerely,

Sander Levin Chair, House Committee on Ways and Means
Henry A. Waxman Chair, House Committee on Energy and Commerce
George Miller Chair, House Committee on Education and Labor
Pete Stark Chair, House Ways and Means Health Subcommittee
Frank Pallone, Jr. Chair, House Energy and Commerce Health Subcommittee
Bart Stupak Chair, House Energy and Commerce Oversight Subcommittee
John D. Dingell Chairman Emeritus, House Committee on Energy and Commerce
Rob Andrews Chair, House Education and Labor Health Subcommittee  

cc: Karen Ignagni, America's Health Insurance Plans

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