Health Insurers Work To Address Issues Involving Retroactively Canceled Policies

Main Category: Health Insurance / Medical Insurance
Article Date: 28 Feb 2008 - 8:00 PDT

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The health insurance industry has begun efforts to "defuse a growing furor over retroactive policy cancellations that have saddled some patients with big medical bills and sparked lawsuits," the Wall Street Journal reports. According to the Journal, health insurers "say they have the right to rescind policies when policyholders don't disclose pre-existing medical conditions" or "when they misrepresent information on their policy application," but "some policy rescissions can seem arbitrary and unfair."

In response to concerns about the issue, America's Health Insurance Plans, in conjunction with state regulators, has begun to draft a proposal that would allow members to appeal policy cancellations, or rescissions, to an independent review panel with the authority to make binding decisions. The proposal would ask states to form such panels, which would include health care professionals and attorneys. Details about the independent review process under the proposal remain undetermined. AHIP President and CEO Karen Ignagni said that the group will discuss the proposal in March at a meeting of the National Association of Insurance Commissioners.

Meanwhile, some health insurers, such as Health Net and Blue Cross of California, have begun to establish their own independent review programs.

Consumer advocacy groups "say independent review could benefit many patients, whose biggest need when a policy is canceled is to get their coverage reinstated, not to file a lawsuit," according to the Journal (Rundle, Wall Street Journal, 2/27).

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