Health Insurance

Congress is taking a close look at a class-action lawsuit led by individuals who claim that their health insurance companies have unfairly dropped their coverage after they began submitting claims for serious illnesses.

Many health insurance companies practice rescission- the practice of canceling an individual health insurance policy after it has been approved, often paid into and claims have been made. However, companies claim to practice rescission in order to combat insurance fraud.

Some individuals are claiming, however, that their coverage was cancelled only after they filed a claim for a serious condition.

One plaintiff, Robin Beaton, claims that she paid her health insurance premiums faithfully every month. Only after she was diagnosed with breast cancer a few months ago, did her health insurance provider, BlueCross BlueShield, deny her claims and drop her policy.

A representative from BlueCross BlueShield claims that Beaton neglected to disclose a visit to a dermatologist a few year prior when initially applying for medical coverage. Neglecting to disclose this information can be interpreted as unintentional insurance fraud, according to the company, and provides cause for dropping her policy.

Health professionals are criticizing the health insurance companies for waiting until a serious claim is made to “do their homework”. Many believe that these major health insurance companies should be researching their policyholders’ medical backgrounds prior to approving their coverage as opposed to only after they file a substantial claim.

In a congressional hearing earlier this week Bart Stupak [D] of Michigan confronted executives from three health insurance companies and asked them if they would pledge to end of the practice of rescission except in the cases of intentional fraud.