Tuesday, August 11, 2009

Health Care Insurers: I Think The Appropriate Word is "Disturbing"

Medical_bag Washington Post's Daily Dose Blog adds more fuel to the health care reform debate:

You might have known that insurers can deny health coverage based on preexisting medical conditions, but here’s something else to worry about: They can take away the coverage you thought you had when actually need it, the government says.

The Department of Health and Human Services put a spotlight on that practice Tuesday in its continuing campaign to build support for an overhaul of health insurance.

“When a person is diagnosed with an expensive condition such as cancer, some insurance companies review his/her initial health status questionnaire,” the HHS said in a posting at HealthReform.Gov. In most states, insurance companies can retroactively cancel individuals' policies if any condition was not disclosed when the policy was obtained, "even if the medical condition is unrelated, and even if the person was not aware of the condition at the time.”

“Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition,” HHS said.

The department cited recent research by the staff of the House Committee on Energy and Commerce, which found that three large insurers rescinded almost 20,000 policies over five years, saving $300 million in medical claims.
At least one insurer included such savings in an employee performance evaluation.

I teach a case in employee benefits law class, McGann v. H&H Music (5th Cir. 1992), that describes a similar practice to this. Unfortunately, the court in McGann found that the participant could not prevail under an ERISA Section 510 retaliation claim when his coverage was dramatically reduced (1 million to $5000) when he told his employer he had AIDS.

Maybe I'll just start counting reasons why health care reform is a necessity and that health insurers cannot continue to exist in a world with little regulation and even less meaningful remedies against them for this type of disturbing conduct.

The employee performance part can be filed under "truly disturbing."



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