UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

June 19, 2009

INSURANCE COMPANIES SAY MALPRACTICE TO CONTINUE

LA Times - Executives of three of the nation's largest health insurers have told federal lawmakers in Washington that they will continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive. . .

An investigation by the House Energy and Commerce subcommittee on oversight and investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses. . .

The executives -- Richard A. Collins, chief executive of UnitedHealth's Golden Rule Insurance Co.; Don Hamm, chief executive of Assurant Health and Brian Sassi, president of consumer business for WellPoint Inc., parent of Blue Cross of California -- were courteous and matter-of-fact in their testimony.

But they would not commit to limiting rescissions to only policyholders who intentionally lie or commit fraud to obtain coverage, a refusal that met with dismay from legislators on both sides of the political aisle.

Experts said it could undermine the industry's efforts to influence health-care-overhaul plans working their way toward the White House.

"Talk about tone deaf," said Robert Laszewski, a former health insurance executive who now counsels companies as a consultant.

Rescission was largely hidden until three years ago, when The Times launched a series of stories disclosing that insurers routinely canceled the medical coverage of individual policyholders who required expensive medical care.

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