Wednesday, September 2, 2009

A Fool and His Health Insurance Money

Think you've got health insurance? Rescission could leave you broke and sick

The practice is "rescission": an insurance-industry procedure of retroactively canceling approved health-insurance policies obtained in the individual market after the policyholders get sick and file large medical claims.

Rescissions are often used to stop fraud on the part of enrollees who have misrepresented their health histories to obtain coverage. But consumer advocates say that insurance companies are driven by profit to revoke coverage based on even inconsequential discrepancies between the application and the medical record. Many insurers even pay employee bonuses for meeting a cancellation quota and for the amount of money saved.

"This amounts to post-claims underwriting," says healthcare advocate Jerry Flannagan of Consumer Watchdog, a nonprofit consumer education and advocacy group. "They're supposed to look at your medical records ahead of time -- but once they offer the coverage, you should be able to rely on it."


I know a solution for this: single-payer universal health care. You know, because it makes sense and is a good value...