WASHINGTON, D.C. — Executives of three of the nation’s largest health insurers told federal lawmakers Tuesday that they would continue canceling medical coverage for some sick policyholders, despite criticism that the practice is unfair and abusive, according to the Los Angeles Times.
A hearing on the controversial practice called “rescission,” which has lef thousands of Americans burdened with huge medical bills even though they paid insurance premiums, began a day after President Obama outlined his proposals for revamping the nation’s health care system, the L.A. Times said.
An investigation by the House Subcommittee on Oversight and Investigations showed that insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the insurers to sidestep paying more than $300 million in medical claims over five years, the Times said.
It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission, and that insurers praised employees during performance reviews for terminating policies of customers who had expensive illnesses, according to the L.A. Times.
“No one can defend, and I certainly cannot defend, the practice of canceling coverage after the fact,” Rep. Michael C. Burgess, a Texas Republican, a member of the subcommittee, told the Times. “There is no acceptable minimum to denying coverage after the fact.”
The insurance executives, Richard A. Collins, chief executive of UnitedHealth’s Golden Rule Insurance Co.; Don Hamm, chief executive of Assurant Health; and Brian Sassi, president of consumer business for WellPoint Inc., parent of Anthem Blue Cross Blue Shield, were courteous and matter-of-fact in their testimony, the Times said.
But the insurance executives would not commit to limiting rescissions to policyholders who lie or commit fraud to get coverage.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Consumer Watchdog issued a press release about the results of one of WellPoint’s recissions. Testifying at the subcommittee meeting on Tuesday, Peggy Raddatz said that her brother, Otto Raddatz, died of lymphoma after losing his health insurance. WellPoint based its rescission on Otto’s failure to disclose an aneurysm and gall stones that he didn’t know he had.
In another Consumer Watchdog release, Whittney Horton of Los Angeles, whose health insurance was canceled by WellPoint after seeking routine care, urged lawmakers at the subcommittee hearing to stop insurers from canceling or downgrading coverage when policyholders get sick. Horton is part of a class-action lawsuit against Blue Cross of California, a WellPoint unit.
Federal lawmakers chastised Indianapolis-based WellPoint and other insurers Tuesday for the “vicious” and “inexcusable” practice of rescission, according to the Indianapolis Star Tribune.
More stories worth a read:
- More than 300 economists declare health insurance for all key to economic recovery (PRNewswire)
- Obama’s health plans needs spending controls, Congressional Budget Office says (Washington Post)
- Ohio governor suggests $2 billion in budget cuts: Targets would include Medicaid, Passport (Columbus Dispatch)
- Watchdog finds COBRA checks in official’s office (Columbus Dispatch)
- FDA says Zicam nasal spray can cause loss of smell (Akron Beacon Journal)
- Cleveland Clinic’s stance on crime lab puzzles Cuyahoga County Prosecutor William Mason (Cleveland Plain Dealer)
- Top 10 grossing non-profit hospitals (Becker’s Hospital Review)
- Cleveland, union chief seek answers to slow weekend ambulance response time (Cleveland Plain Dealer)
- Proposed Senate health care cuts will reduce health care access for all Michgan citizens (PRNewswire)
- Synthes, medical device maker, accused of improper marketing (New York Times)
- Virus halts production at Genzyme facility (Mass High Tech)
- Generex pulls in $11 million in stock sale (Mass High Tech)
- Partners Healthcare spins out wireless health start-up (mobihealthnews)
- Hospital safety institute launching program with federal cash (Business Courier of Cincinnati)
- Merge Healthcare commences exchange offer for etrials Worldwide Inc. shares (BusinessWire)
- VA faces questions over tainted colonoscopies (HealthDay News/U.S. News & World Report)
- American Medical Association: the white coats are going, the white coats are going (Wall Street Journal Health blog)
[Photo credit: By Ed Brown, as Edbrown05, on 05-04-2005; posted at Wikipedia Commons]
