Published: 2009-07-08 21:59:52
Author: Boston Globe | June 25, 2009
LAST WEEK, three insurance executives made starkly clear why President Obama is right to insist on a public-plan option in any health reform package. The three stood before Congress and refused to stop the practice of canceling coverage of sick policyholders for unrelated medical reasons, even in cases where the firms can’t show intentional fraud by the policyholders. The industry should be relieved that all Obama is threatening it with is a rival plan and not a SWAT team.
The industry’s bloodless term for pulling the coverage of patients with non-group policies even after they have paid years of premiums is “rescission.’’ Companies rescind policies - and save themselves millions in pending claims - even when there is no evidence that the sick policyholder had failed to disclose a relevant preexisting condition. Congress heard, for instance, about a Texas nurse who lost coverage after a diagnosis for aggressive breast cancer. The reason? She had not disclosed a past visit to a dermatologist for acne.
A man with stage four non-Hodgkin type lymphoma lost his coverage as he was about to receive a stem-cell implant. The company pounced because a doctor had once noted in the patient’s file that a scan had shown a small aneurysm and some gallstones. The doctor had not informed the patient.
“Overall, what we have found is that the market for individual health insurance in the United States is fundamentally flawed,’’ said Representative Henry Waxman of California in a supreme understatement.