Think you've got health insurance? Rescission could leave you broke and sick
Filed under: Insurance, Health, Insurance - Life Insurance, Insurance - Health Insurance
Karen Knee's insurance problems began with her 2005 New Year's resolution: addressing her nagging health concerns. First on her list was to get those little benign cysts on her scalp removed. Blue Cross pre-approved the procedure, and it went off without a hitch -- at first.But then the insurer retroactively canceled her policy, claiming that Knee (at right), of Orange County, Calif., had failed to disclose a pre-existing condition, and saddled her with a $30,000 medical bill.
Knee was stunned. Four years earlier, she had applied for coverage online and included everything she could recall about her health history -- doctors' names, prescriptions taken, the test results of her latest pap smear. She never thought to mention that her back sometimes felt sore after playing soccer, or that she had once taken pain pills after a muscle spasm. "You think of a pre-existing condition as diabetes or cancer treatment, not a onetime little back spasm," she says. "I played soccer three days a week and was always being knocked down. Yes, my back was sore, but so were my knees and ankles. Big deal."
In fact, it was a big deal. After scouring her medical records, Blue Cross cited Knee's occasional sore back as justification to rescind her insurance coverage. (Blue Cross says it does not comment on individual incidents in litigation.)
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."
That's what Heidi Bleazard (right) thought. Bleazard, 41, of Logan, Utah, had believed she could rely on the policy that she and her husband, Keith, 40, purchased from Regence Blue Cross & Blue Shield of Utah in 2005. But five months later, she suffered a pulmonary contusion, three broken ribs, and a brain injury in a devastating mountain-biking accident. At that point, Regence pulled the plug on her coverage -- because Keith had injured his back 10 years earlier.The Bleazards appealed, arguing that they had disclosed Keith's injury to the insurance agent and the nurse who completed the paperwork, and mentioned it on the initial application. Regence refused to budge (and also declines to comment on this case).
As more and more policyholders are forced to purchase private insurance, they could easily find themselves encountering the same problem. Rescission cases have drawn increased scrutiny from state health regulators who have levied million-dollar fines against insurers. Courts had recently begun siding with patients who filled out their applications in good faith and paid their premiums for years, only to be dumped when they needed insurance most.
This issue has also drawn the attention of Congress, where witnesses testified that state protections against the practice are often weak and insufficient. Witnesses asked the federal government to step in to fill the breach. The healthcare reform bills proposed in Congress would end this practice of rescission.
In the meantime, Knee is slowly paying off the hospital bills, and the Bleazards have spent three years battling a series of financial and medical problems. In addition to the $150,000 in hospital bills, they must also pay for Heidi's physical therapy and medication for her brain injury. Both Knee and the Bleazards are suing their insurers.
"Since this happened, no insurer will touch us," Keith Bleazard says. "So we just try to stay out of trouble."
Reader Comments (Page 1 of 1)
9-02-2009 @ 4:32PM
slinkypomo said...
Wow, that is so scary dude. I cant even begin to imagine!
RT
http://www.anonymous-web.be.tc
Reply
9-02-2009 @ 5:16PM
VA Refinance said...
this economy and the health care is going to be the end of america. we can only hope and pray we will make it threw. if you are lookign for a mortgage check me out at www.vareficenter.com
Reply
9-02-2009 @ 5:31PM
Bromen Mariner said...
Look at it this way: We went to war, violated the constitiution, and imprisoned combatants over 3000 people who lost their lives on 9/11.
If the number of people who died due to rescission of their otherwise valid health care policies, then we should put those who run the insurance companies, or reward their employees for terrorizing people by refusing care in Guantanamo. Forever. This is an outrage that can only be eliminated by making the insurance companies pay a price for the damage that they do. America, wake up! Each one of you who thinks that you will be covered has no way of knowing - until it is too late - that this is the normal practice of the people who gladly take your money until you are sick or injured, and then they let you go down the toilet on a pretense. It should be considered domestic terrorism. Make it hurt!
Reply
9-03-2009 @ 2:04AM
Trevor said...
If it's the end of America hopefully these new bills put to law shall rebuild it so that large corps can't steal premiums and member fees for YEARS only to revoke them WHEN they claim on them.
Canada's system might mean yer as equal (and thus, waiting in line for NON life threatening injuries) but also means the guy who CAN'T wait goes first and yer 2nd, no problem.
Least yer not walking out of a hospital with a 150,000 bucks lost because the government has been taking kick backs on your taxes and instead of helping has been profiting from your nation.
Give em hell Barack! After health care and life threatening issues, please look at your failing Internet infrastructure (ISP's taking tax money and NOT upgrading the lines).
Seems there is a LOT of house cleaning to do in Washington. Also sad that even the GOVERNMENT would even NEED to fight such measures and that it can't be mandated like all the bad laws they pass w/o ANY fighting to SUCH a degree...
Reply
9-03-2009 @ 12:12PM
Lapsed Pastafarian said...
Hah, Canadian healthcare, tell that to my uncle who died of prostate cancer while waiting to get chemo appts.
9-04-2009 @ 12:34PM
odaravlaac said...
Trevor,
It also means people with political and government connections will find a sneaky way go first to get medical care. If you don't see that then you are in denial.
Everyone forgets that insurers are a small part of the problem. The real problem is the incompetence and corrupt supplier relations by hospital management. Why isn't anybody complaining about the $30,000 bill levied by the hospital which seems high for a cyst removal?
We will never solve the health care debate if the focus is not placed on high cost of medical bills to begin with instead of insurance coverage.
9-03-2009 @ 9:10AM
Kent said...
Recission is a policy provision which permits the insurer to "negate" coverage as if it did not exist and return the premium to the policyholder.
Recission will occur if you LIE on your insurance application.
Knee "kneeds" to admit she LIED and get over it.
Reply
9-03-2009 @ 12:04PM
Cindy said...
Let me guess, Kent works for an insurance company....Do you also carry bats and attend the Town Hall meetings?? It is horrible what companies are doing to people in need of health care. GO OBAMA!!!!!
9-03-2009 @ 12:49PM
vernon said...
if these obama makes insurance cos cover preexisting conditions it will put them out of business ill drop my coverage and when i get sick ill run down and get ins
Reply
9-03-2009 @ 1:35PM
Laina said...
Golden Rule/United Health Care nearly bankrupted me (my stupidity for letting them) with the ever increasing premiums. Healthy, never smoked, low to normal weight always, went to the doctor only once a year and paid out of pocket for THAT. After the premiums got to nearly $600 a month, I went for what they encouraged as my 'Once a year Wellness Vistit'...I'd planned to 'fire' them afterwards, and did. Out of a doctor and lab (female exam) fees of over $778, they paid $40~!! To top that...the lab, Qwest or Quest, was local...one of my hair cut clients came in to get his $10 haircut for the cruise his wife's company was sending them on...she worked for the same lab. I told him, jokingly, that I was helping pay for his cruise.
Another jab at insurance companies, I have SEEN NationWide Plazas in Columbus, OH (where I use to live)...always said they should call it NationWide PALACES. So, some of have seen the temples they build to honor their companies with OUR money.
Reply
9-03-2009 @ 2:19PM
Nancy said...
Situations like these are all too common in the U.S. They're part of the reason we do need some health care reform, but let's fix the abuses in our current system -- not throw it out entirely. God help us if the feds get total control over health care!
Reply
9-03-2009 @ 2:46PM
pbc444 said...
There are a good many who are too ignorant regarding the TRUE REALITY of their own HEALTH INSURANCE and are destined to be shocked when THEIR time of need somes (and it generaly comes to all at one time or another !!!) The blatant idocy of decry against the CHOICE of PUBLIC OPTION is truly incomprehensionable for they obviously ave yet to bother doing their OWN math in regards to the costs of what they presently hold as healtcare insurance. Are they incable of reviewing, seeing it even NOW cost THEM , THEMSELVES MORE and they get LESS COVERAGE and that trend but continues. THEY will be paying more even with NO PUBLIC OPTION CHOICE AVAIABLALE to avail THEMSELVES when the time comes that they realize they can NOT AFFORD to keep feeding the INSURANCE COMPLEX COFFERS and get so little in return to actually proide themselves health care. IT IS ASTOUNDING and resoundingy STUPIDITY ON PARADE !!!
Reply
9-03-2009 @ 6:05PM
steveliberman said...
Knee YOU need to get over it. Wait till its your turn in the barrel!
Reply
9-03-2009 @ 6:57PM
lljayne67 said...
steveliberman & kent..Shame on you both. I have been in the medical industry for 26 years, attempting to get insurance companies to pay bills.
In my professional, educated, hands-on opinion, Insurance companies are the 2nd biggest scammers in this country. Not important who I believe are #1.
Maybe you both are rich & have the $ to back you up when your insurance company screws you. You are both probably employed by insurance companies. Hell, I wouldn't be surprised if either of you are inherents of some insurance company founder or CFO. I say inherents because with those comments, neither of you could say such a shallow thing, otherwise.
People, to name a few, STAY AWAY FROM UNITED HEALTHCARE and All BLUE CROSS'! They will suck all of your premium $ up and not pay a damn VALID claim.
THEIR EMPLOYEES ARE ALL ROBOTS! CALL THEIR 800# and HOPE & PRAY YOU CAN TALK TO SOMEBODY IN THE U.S.
THEY USE EVERY STALL TACTIC KNOWN SO AS NOT TO PAY A CLAIM.
I WOULD SAY APPROIMATELY 60% OF THEIR INSUREDS ARE IN COLLECTIONS DUE TO THEM NO PAYING DOCTOR & HOSPITAL BILLS.
BUT THAT'S OK, CAUSE THE NEW PRESIDENT OF UNITED HEALTHCARE WAS FLOWN INTO TAMPA, FLORIDA ON A PRIVATE JET! TO MEET EMPLOYEES!
PEOPLE, LISTEN UP! YOU PAID FOR THAT PRIVATE JET and YOU STILL GET TO PAY YOUR OWN MEDICAL BILLS BECAUSE!
SOUNDS LIKE A GREAT DEAL TO ME!
KNOW YOUR BENEFITS.......ESPECIALLY THE EXCLUSIONS!!!!
MAKE SURE YOUR INSURANCE COMPANY HAS CURRENT MAILING ADDRESS.
RESPOND TO FORMS THEY WANT FILLED OUT. As ridiculous as this may sound, if you wake up with a backache, they're gonna send you an "Accident Detail" form, wanting to know how you "hurt" you back. REMEMBER, THEY'RE LOOKING FOR AN EXCUSE NOT TO PAY YOUR BILL. But don't return the form...they won't pay & you'll be held liable.
EVERY YEAR you will get a "coordination of benefits" form. They want to know if you have any other insurance. Again, don't return the form....they won't pay & you'll be held liable.
Yes, this is my soapbox.
But let me tell you all something. Until people start filing complaints with their employers, state insurance commissioners, congressman, this is a vicious cylce that will never end.
Anybody ever hear of CLASS ACTION LAWSUITS!
Reply
9-04-2009 @ 2:17PM
thomas said...
the word "Rescission" is spelled wrong.
the correct spelling should be.... RECESSION.
Reply
9-04-2009 @ 8:45AM
Joe Griffith said...
Th healthcare system we have now is not wrking for a lot of people nd we do need a change but do you really beleive the US government plan will solve thsi problem, look at ss and medicare, the US government is not the answer.
http://www.squidoo.com/therigthinsurance
Reply
9-10-2009 @ 2:30PM
Gen Y said...
No, a RECESSION is an economic happening. RESCISSION is the act of an insurance company revoking coverage.
Read the article, dimwit.
Reply
9-10-2009 @ 6:58PM
Joan said...
Oh, I finally see. Here are Ms. Palin's "Death Panels"....they are actually insurance panels that make the decisions as to whether or not you will get the treatments they have promised you for all that money they have taken.
Reply
9-23-2009 @ 3:06PM
web said...
Insurance of all kinds is basically a legalized form of a protection racket. Never trust that your insurance will be there for you and read the fine print. The minute you take it for granted, youll lose it. Insurance companies are still for-profit companies after all.
That being said, rescission is a despicable practice. Its one thing to deny coverage to a newcomer, its quite another to rip it out from under someone for a late payment or minor piece of information.
Reply