on health insurance rescissions before the House Subcommittee on Oversight and Investigations provided yet another example of something insurers seem intent on proving beyond a shadow of a doubt: their CEOs are their own worst enemies. The chief executives of three of the largest health insurers in the country, UnitedHealth Group, WellPoint and Assurant, were asked directly in the hearing if they were willing to limit their rescission of insurance policies to situations where the applicant intended to defraud the insurer. Each refused to agree to that restriction.
There's not too much dispute about the way in which health insurers have abused rescission across the country. I've litigated several of these cases successfully for insureds. The insurer's overreaching is simple: when a policy has been in place for less than a couple of years and the insured has an injury or illness that leads to significant claims, the insurer has software programs that flag the claims. The insurer than gathers medical records and goes back over the insured's original application looking for any omissions or discrepancies between the application and the insured's medical history. If any are found, the insurer retroactively cancels, rescinds, the policy and saves itself a bundle. The insureds don't fare so well. When they are most financially vulnerable they find that the policy they've been relying on to take care of them, on which they've faithfully paid premiums, isn't there after all.
The L.A. Times article notes that the CEO's perspective on rescission creates doubt about whether insurer overreaching can be held in check without providing consumers an option to buy their health coverage through a government sponsored plan rather than a for profit insurance company. As I've listened to the debate about reforming how we deliver and finance healthcare in our country, it seems that insurers present two contradictory arguments. On the one hand, they say government provided medical coverage would degrade the quality of the nation's healthcare and create dissatisfied consumers. On the other hand, government provided medical coverage would lead to the demise of for profit insurance by putting them at tremendous competitive disadvantage. So make up your mind insurance industry. Is the public option better or worse in effectively delivering high quality medical care?
For more on insurance CEOs as their own worst enemies, consider
McGuire, former chief executive of UnitedHealth Group.
Category: Keyword Search: rescission
Blue Shield of California has aggressively defended against a lawsuit brought by Steve and Cindy Hailey complaining that Blue Shield wrongfully rescinded their health insurance policy. Yesterday the AP reported
that a trial court judge in California directed a verdict in favor of Blue Shield after hearing the case presented by the Haileys. Congratulations to Blue Shield and condolences to the Haileys. I'm looking forward to my own forthcoming battle
with Blue Shield.
I don't think that every grievance a person or entity has should end up in court or that, being in court, every dispute should end up going to the judge or jury for decision. But there are many disputes that need to be presented to an impartial finder of fact for resolution. The right to take grievances to court is constitutionally guaranted. I sometimes think that with so many whining about the supposed over-lawyering of our society (think Philip K. Howard
), we lose sight of the importance of the courthouse doors being open.
There's a remarkable positive correlation between large business interests and efforts to restrict or close the court house doors to regular people. As Dahlia Lithwick suggests
, the solution to most of our problems is not less regulation or oversight. Especially in light of our recent home mortgage and financial meltdown, we should be thinking about how to ensure greater, not less, accountability from the corporate and government institutions that have such a huge impact on our day-to-day lives. Kvetching about some moron who thinks he's entitled to millions when the dry cleaners lose a pair of his pants may be fun among friends. However, it hardly serves as a helpful example of the significant challenges we face in protecting the rights and assets of regular people in our society. Idiosyncratic, greedy or egomaniacal cranks in our society who occasionally abuse the legal system have always been, and always will, be with us. But it's beyond doubt that there are bigger, more systematic, abuses in our society we should be concerned about.
Category: Keyword Search: rescission