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Wednesday, April 28, 2010

Update - Two Firms Agree to End Recission - Maybe

Within a day of House leaders calling on insurance companies to preemptively end the practice of rescinding plans when a patient gets sick, two major insurers have complied.

UnitedHealthcare, "has ended its limited use of rescissions effective immediately, except in cases of fraud or intentional misrepresentation of material fact," the company announced on Wednesday in a clear admission that it was engaged in the practice as a matter of policy.

On Tuesday evening, WellPoint agreed to end the practice. The law regarding rescissions officially takes effect on Sept. 23.

UnitedHealthcare also intends to comply with an additional request, the company said, and "will be instituting independent, external third party review in the near term" that would allowed patients whose coverage is terminated to appeal the decision.

One key question remains.  What exactly constitutes fraud or misrepresentation will continue to be subject to dispute. Does forgetting to note childhood acne give insurers license to rescind a policy?

1 comment:

  1. Definitely a key question and cause for concern.
    Insurance policies always have so much fine print and so many disclaimers. Even if one does the "right thing" in being insured, there is always the concern that there will be some fine print that will render the contract void.