May 2010 News – Health Care Insurance Industry will end Rescission
Rescission, as defined by Webster, means “the cancellation of a contract and the return of the parties to the positions they would have had if the contract had not been made.” Health insurance news coverage has been abuzz with this word and the reason is that under the health reform laws, this practice will be illegal.
The health insurance industry has decided to end the practice of canceling (rescinding) claims once a patient is sick and this new policy is to take effect in May 2010. The new health care laws will go into effect in September 2010, so the May date is well before the deadline. After September 2010, any questionable case will be reviewed by a third-party to investigate for fraud or misrepresentation.
“While many health plans already abide by the standards outlined in the new law, our community is committed to implementing the new standards in May 2010 to ensure that individuals and families will have greater peace of mind when purchasing coverage on their own,” America’s Health Insurance Plan President Karen Ignagni said in a letter to top House Democrats.
The decision came on the heels of WellPoint being targeted because of reports that it had singled-out breast cancer patients for rescission. WellPoint announced they would end the practice on May 1, 2010 along with UnitedHealth announcing they had eliminated the practice.
The practice of rescinding policies has actually been illegal for some time now. Under law, health insurance companies only use that practice when they suspect fraud or inaccurate information. WellPoint stands by the fact that they don’t single out breast cancer patients and that the company is actually a strong advocate for breast cancer research.
