WellPoint, Blue Shield of Calif. To Stop Rescission Practices
On Tuesday, WellPoint and Blue Shield of California announced that they will stop the practice of rescinding health insurance policies once a patient gets ill, the Los Angeles Times reports. WellPoint is the parent company of Anthem Blue Cross of California (Girion, Los Angeles Times, 4/28).
WellPoint announced that beginning May 1, it will comply with a provision in the new health reform law that restricts rescissions only to cases where patients committed fraud or intentionally misrepresented their medical history. The provision of the law is not scheduled to take effect until Sept. 23 (Murphy, AP/Ventura County Star, 4/27).
California History of Rescissions
Since 2004, at least 5,000 Californians have had their insurance rescinded by one ofÂ the state's five biggest health insurers -- Anthem Blue Cross, Blue Shield, Health Net, Kaiser Permanente and PacifiCare.
Legal action against many of the companies resulted in large monetary settlements and prompted nearly all the insurers to stop policy rescission, the Times reports. State records show that in 2009 only four policy rescissions were reported to the California Department of Managed Health Care -- down from 1,552 in 2005 (Los Angeles Times, 4/28).
Obama Administration, Democrats Urge Early Action
Meanwhile, House Democrats and the Obama administration on Tuesday requested that health insurers immediately stop the practice of rescinding consumers' health policies when they get sick, CQ Today reports.
HHS Secretary Kathleen Sebelius, during a meeting of the American Hospital Association, first praised insurers for their decision to comply with a provision in the new reform law that requires them to keep young people on their parents' insurance plans until age 26, even before it is enforced in September. However, Sebelius criticized insurers for cancelling their customers' policies "because they are sick and just when they need [the coverage] the most."
She said that HHS would closely monitor insurers that might be involved in the practice of rescissions and noted that she would not hesitate to engage in "hand-to-hand combat" with them if they are not cooperative (Norman/Ethridge, CQ Today, 4/27).
Meanwhile, eight House committee and subcommittee chairs sent a letter to seven major insurers calling for a voluntary end to the practice of rescissions before the new reform law's provision takes effect. The letter -- cosigned by Democratic leaders on the House Education and Labor, Energy and Commerce and Ways and Means committees -- went to:
- Assurant Health;
- BlueCross BlueShield Association;
- Kaiser Permanente;
- UnitedHealth Group; and
The lawmakers wrote, "These rescissions hurt patients who need coverage the most." They also commended the insurers for voluntarily implementing the coverage requirement for young adults, adding, "Your actions signal that you are willing to work to make health insurance more accessible and affordable" (Haberkorn, Politico, 4/27).
The lawmakers also urged the companies to implement a third-party review process that would ensure policies would be rescinded only in cases of fraud or intentional material misrepresentation (CQ Today, 4/27). They wrote that doing so "would further demonstrate a commitment to reliable coverage for your policy holders" (Heavey, Reuters, 4/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.