Insurers to Stop Dropping Coverage for Sick Ahead of Reform Deadline

April 28, 2010 ( – UnitedHealth Group and WellPoint have said they will stop dropping health coverage for customers after they get sick, ahead of the September 23 deadline for stopping the practice required by the new health reform law.

UnitedHealth said it will stop the practice, known as rescission, immediately, and WellPoint said it will stop the practice as of May 1. According to Reuters, the insurers are responding from pressure from Democrats and the Obama administration to implement the reform sooner than the six months the law gave them to halt the termination of health care coverage for patients after they get sick, except in cases of fraud or misrepresentation.

The reform law also prohibits insurers from refusing to cover people with pre-existing conditions and capping lifetime payouts. =

Democrats from three U.S. House committees wrote to seven health insurance executives urging them to immediately stop the practice. A separate letter from 57 Democrats was directed at WellPoint alone.

Reuters said lawmakers pushed for action sooner following its report on April 22 that WellPoint used computer algorithms to target women with breast cancer for an investigation, with the intent of canceling their health care policies. WellPoint, the largest health plan in the Blue Cross Blue Shield Assn., said its software looks for conditions patients may have had before seeking insurance coverage but that it does not single out breast cancer. It has called the Reuters report inaccurate, though Reuters stands by its story.

The letter asked WellPoint, UnitedHealth Group Inc., Humana Inc., Aetna Inc. and other insurers to immediately ban rescission except in cases of fraud or intentional misrepresentations, and to institute third-party reviews of any decision to drop coverage. The letter also went to the Blue Cross Blue Shield Assn., Kaiser Permanente and Assurant Health, part of Assurant Inc.

Humana CEO Mike McCallister told Reuters the insurer would comply fully with the law but that it needed to examine whether it could act on the lawmakers’ request. Assurant spokeswoman Shawn Kahle said Assurant Health already has third-party reviews and that it will act as quickly as possible to end rescission.

Aetna said in an emailed statement that it began external reviews in 2008 to allow customers facing rescission to obtain a no-cost, third-party review. Blue Cross and Blue Shield Assn. spokesman Brett Lieberman said in an emailed statement that the group was reviewing the committees’ letter.

Representatives for other insurers either could not be reached or had no comment, according to Reuters.

UnitedHealthcare, Humana, Kaiser Permanente, and WellPoint have already said they will ahead of schedule put into effect provisions of the new health care law to let adult children stay on parents’ plans until age 26 (see Insurers Beat Health Care Reform Deadline on Adult Children Coverage).