WASHINGTON, DC - U.S. Congressman Bart Stupak (D-Menominee), chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, is asking the CEOs of seven insurance companies to voluntarily end the practice of rescission - cancelling insurance coverage for any excuse when policyholders become seriously ill - in advance of a federal ban on rescissions set to take effect in September.
Last week, six of the seven insurance companies announced plans to allow individuals up to age 26 to receive health insurance coverage under their parents' policies. These plans came three months ahead of the provisions becoming mandatory under the health care reform bill signed into law last month. CEOs from WellPoint Inc., Kaiser Permanente, Assurant Health, UnitedHealth Group Inc., Humana Inc., Blue Cross Blue Shield Association, and Aetna Inc. received the letter urging the insurers to immediately and voluntarily end the practice of rescission, except in the case of fraud or material misrepresentation, even before required to do so by law. The letter also asks that the insurers institute independent third-party review whenever a policy is to be rescinded or canceled.
I am encouraged by recent actions taken by these companies to cooperate with Congress and the administration to implement key consumer protection provisions of the health care reform legislation ahead of schedule," Stupak said. "I hope the same action will be taken on the unconscionable practice of terminating policyholders' coverage when they become sick and need it the most. By acting now, instead of waiting six months until the new law bans rescission, countless people could be spared the financial and emotional distress of being denied critical health insurance coverage when they are sick."
Under H.R. 3590, the Patient Protection and Affordable Care Act, the practice of rescissions will be prohibited beginning September 23, 2010.
As chairman of the Subcommittee on Oversight and Investigations, Stupak has held a number of hearings on insurance industry practices. Last June and July, he looked into rescissions, an industry practice of dropping a policyholder when he or she becomes sick. In the June 2009 hearing, executives from Assurant, UnitedHealth Group and WellPoint declined to end the practice of rescissions voluntarily when asked by Stupak to do so. In October, Stupak held hearings on problems associated with underinsurance and the industry practice of purging small business coverage, or raising premiums to unaffordable rates forcing the company to drop their coverage after employees become sick.
Stupak was joined in sending the letter to insurers by House Ways and Means Committee Chairman Sander Levin (D-MI), House Energy and Commerce Committee Chairman Henry Waxman (D-CA), House Education and Labor Committee Chairman George Miller (D-CA), House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA), House Energy and Commerce Health Subcommittee Chairman Frank Pallone (D-NJ), House Energy and Commerce Committee Chairman Emeritus John D. Dingell (D-MI) and House Education and Labor Health Subcommittee Chairman Robert Andrews (D-NJ).