With Pressure from HHS and Congress, Insurers Address Rescission Policies

Janice Simmons, April 28, 2010

As Health and Human Services Secretary Kathleen Sebelius was speaking Tuesday at the American Hospital Association's annual membership forum in Washington, DC, several insurers were being asked to clarify coverage policies—particularly in regard to rescissions—in advance of a federal deadline under the new healthcare reform act.

Sebelius told hospital leaders about media reports that emerged last week on "how the nation's largest insurance company, WellPoint, was specifically targeting women with breast cancer with the goal of canceling their coverage." While the accuracy of the reports has been challenged by WellPoint, an unwanted spotlight was placed on the controversial subject of rescission.

Sebelius said that she was asking insurers to implement a provision—prior to the September deadline stipulated in the new healthcare reform law—"to agree not to rescind the coverage of any premium paying customer except in cases of deliberate fraud."

Her request paralleled a request included in a letter sent Tuesday by the heads of three House committees—Ways and Means, Energy and Commerce, and Education and Labor—to seven insurance companies CEOs "to end any such abusive practices immediately." The companies are WellPoint, Kaiser Permanente, Assurant Health, UnitedHealth Group, Humana, Blue Cross Blue Shield Association, and Aetna.

Indianapolis based WellPoint became the first to announce on Tuesday that starting on May 1, it will implement a provision preventing its insurers from rescinding policies except in cases of fraud.

The action comes on the heels of another HHS request a week ago in which insurers agreed to implement policies—before a September healthcare reform deadline—that would permit parents to keep adult children on their policies through age 26.

"Already, almost all of the country's largest health insurers have agreed to extend parental coverage including WellPoint, Humana, United, Aetna, Kaiser, Coventry, and Blue Cross Blue Shield plans across the country," Sebelius told the AHA audience.

"And I'm pleased to announce that in the last few days, I received letters from Cigna and a group of prominent non profit insurers including Geisinger, Health Partners, and Group Health of Seattle saying that they would do the same," she added.

In addition to communicating with insurers about the new reform legislation, Sebelius said that over the last few weeks, HHS also has "been working closely with states to set up high risk insurance pools for a particularly vulnerable group of Americans: people who are uninsured and have preexisting conditions."

Janice Simmons Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.
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