Rescinding Health Insurance
Then, of course, there was the much-publicized decision earlier this year when Cigna HealthCare denied a liver transplant for a 17-year-old girl in California. The insurer then changed its mind, but it was too late—the girl died a few hours after the reversal was announced. Another insurer decided that after years of paying for nursing care for a badly disabled boy, the boy no longer needed it, even though he suffered from severe brain damage and was unable to walk, sit up, speak, or eat by mouth.
California's Department of Managed Health Care is trying to help people get their policies back. In mid-April, the department announced that it was ordering immediate reinstatement of policies for 26 consumers whose policies the department found were wrongfully rescinded. The department is also ordering a re-review of all other rescissions over the past 4 years as part of its ongoing investigation into the rescission practices of five of the largest health plans that offer individual coverage to state residents.
From all these examples, one could assert that there is a problem in California with insurers' wanting to get out of insurance contracts once an illness or treatment has occurred. But is it an epidemic, or is this problem of rescission limited to California? Evidence has not suggested the problem is “systemic” nationwide, but where there is smoke, there surely is fire. One thing is certain: Insurers seem to be playing the “blame game”—blaming consumers for not filling out applications for coverage properly when these companies have failed to properly investigate the contents of those applications. Ain't that the American way now—place blame on others for your own failings?
Equally noteworthy is that when insurers rescind health coverage due to their own shortcomings, they can still retain premiums paid by patients or employers, deny payments to doctors and health care facilities for care rendered—and perhaps then make their profit margins even heftier. Moreover, buying insurance to protect against a loss or risk is the expectation of only those who buy the insurance—and also, perhaps, the physicians who treat patients because they have certain insurance coverage; they are expecting to be paid by that insurer. Another perspective exists, however: to see how inventive an entity protecting against that risk can be to deny or limit the coverage purchased, and to find ways to preclude the doctors who treat those patients from getting paid.
In the end, maybe the Latin, caveat emptor, might be worth thinking about. However, it should never come to this, since the insurance laws of any state in which an insurer wishes to write health policies should be inclusive of a provision or two barring cancellations or rescissions of policies based on innocent or negligently made mistakes done by the insured or anyone acting on behalf of the insured in filling out an application for insurance.
Regardless of what remedies are put in place, a perception also certainly exists that rescission of health care coverage only adds to the woes of the health care crisis now engulfing our economy and nation today. But what is important for the reader to know is that maybe health insurers do not insure medical disease or injury, but instead ensure that they will avoid risks themselves once a patient makes a claim.
