Targeted Rescission by Health Insurers

Whenever health insurance reform is seriously considered as a legislative issue and not just as a campaign trail talking point, people crawl out of the woodwork to affect the agenda for their own ends. American citizens who favor government-run single-payer systems vie for legislative clout with those who like the current privatized system, and the debate has ignited the libertarians who feel government involvement in health care can only hurt ordinary people - especially a law mandating that everyone buy in or pay a tax penalty. On all sides of this issue, too, are lobbyists seeking to harness the power of the electorate to further their own ends - most of them employed by insurance providers, but some who ally with activist organizations as well. Given the current political climate, it's important to remember that these issues don't exist in a vacuum of ideological purity; health care costs continue to rise, and the means by which we obtain coverage for health care are flawed at best. Most importantly, the way we handle health insurance affects real people. One of those people is a young man named Jerome Mitchell.

Mitchell, now 25 years old, bought his own health insurance at age 17 via a company called Fortis (now known as Assurant Health). Less than a year later, he was diagnosed with HIV and given a life expectancy of about four years without treatment. Soon after receiving that diagnosis, Mitchell was informed by Fortis that his policy had been dropped. Seeking to find the cause of the policy cancellation, Mitchell attempted numerous times to contact Fortis, even enlisting the help of his case worker and an attorney. No response was forthcoming from the insurance company, so Mitchell filed suit against them.

The information which came out of the trial proceedings was chilling. Rescission, a tactic by which insurers investigate customers with terminal illnesses to establish grounds for canceling their policies to reduce costs, has long been in practice. Rescission efforts by insurers are rarely warranted; the California Department of Managed Health Care examined a random sampling of 90 such cancellations by Anthem Blue Cross in 2007 and found that none of those policy rescissions were legal. In the case of Fortis, however, something even more sinister was going on. Fortis maintained a company policy of targeting every HIV patient on their enrollment list with a rescission investigation, even going so far as to build specific algorithms into their internal databases which automatically alerted their auditors to new HIV diagnoses. They employed a firm closed-door policy in their review process, keeping no records of minutes or votes and concealing the identities of all persons involved in the rescission process. Strangely, commonly available information which was accessible for other rescission records was missing or willfully omitted by Fortis in their records regarding Jerome Mitchell's policy.

Most damning to Fortis's case in these proceedings was the fact that they based their decision to cancel Mitchell's policy on a note from a nurse in early 2002 around the time of his diagnosis which was accidentally misdated as 2001. The case auditor who reviewed Mitchell's file even noted that the note was probably erroneously dated and questioned whether it could be considered grounds for rescission. Fortis didn't seem to want to take the time to check it out; it was better for their bottom line to drop Mitchell on the flimsiest of pretexts.

While Jerome Mitchell managed to obtain a $10 million judgment against Fortis in 2009, this practice bodes ill for the rest of us. Mitchell played by the rules, enrolling in and paying premiums for health coverage and acting in good faith. The insurance companies don't seem to want to play by those rules. As the baby boomers climb in age and experience more potentially terminal health diagnoses, how many more people will be caught in the web of rescission over the next ten years? At the very least, industry regulation is warranted to prevent these abuses from happening again.

Brad Brubaker is a technical writer specializing in mobility devices for seniors and the disabled. Brad's particular area of expertise is lift chairs. For more information about lift chairs, visit US Medical Supplies.

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