Insurers have no plans to end rescission practices

Despite all the bad press on the practice of rescissions, don't expect health insurers to stop it anytime soon. Executives from WellPoint, UnitedHealth Group and Assurant defended the practice on Tuesday, telling lawmakers at a Washington, D.C. hearing it was a necessary action that helps curb fraud, buts leads to immediately higher healthcare costs, according to an article in the Los Angeles Times.

Experts at the hearing blasted the executives, with Democratic strategist Paul Begala going as far as to say the insistence on such actions undermines any effort to have a legitimate voice in the healthcare reform debate. "The industry has tried very hard in this current effort not to be the bad guy, not to wear the black hat," he told the Los Angeles Times. "The trouble is that all that hard work and goodwill is at risk if in fact they are pursuing" rescissions.

The article points out that over a five-year period, the three represented insurance companies combine to cancel coverage for more than 20,000 people, which helped them to avoid paying roughly $300 million in medical claims. Some companies, such as WellPoint's Blue Cross, even gave employees exemplary marks on reviews for saving money by canceling lots of policyholders.

Rep. Joe Barton (R-TX) understands the companies' need to guard against fraud, but still lashed out at the executives.

"...If a citizen acts in good faith, we should expect the insurance company that takes their money to act in good faith also," he said.

For more on this hearing:
- here's the Los Angeles Times article

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.