I’m hearing quite a bit these days both in the media and in the blogosphere about “rescission”, the term that’s being used for summary cancellation of people’s healthcare insurance, presumably due to pre-existing conditions unreported at the time the policy was written or some other reason or pretext.
I’ve carried healthcare insurance, been insured by my employer, or been covered under my family’s healthcare insurance over a period of well over a half century. Neither, I, my family, my siblings or their families, nor, to the best of my knowledge, anybody I know has had this experience even though hundreds of thousands of dollars in claims have been paid by their insurance companies over the years.
Contrariwise, the insurance companies insist that those whose insurance is cancelled for anything other than non-payment is very, very small: 1% or less. I have personal first-hand experience of insurance companies bending their rules in favor of insureds rather than the other way around.
However, I’d like to get some idea of the scale and scope of the problem. So, in a completely non-scientifiic, unverifiable, and biased study, I’m going to ask for readers to contribute their own experiences with having their health insurance cancelled for any reason other than non-payment.
Please tell your story. First-hand experiences only, please. No hearsay.
Dave,
BCBS tried to cancel my health insurance in 1994. The stated reason was lack of payment, but since I hadn’t missed a payment, the real reason was total incompetence in two of their offices or an effort to stop paying medical bills for a person with cancer.
In late 1993 my employer closed its door. I wasn’t eligible for Cobra, but employer’s coverage had a conversion policy clause. I took advantage of it. The same month I was told my employer was closing, I also learned I had malignant melanoma. In 1994 I had surgery for 4 separate melanomas on my body and had numerous other lesions removed.
Some of my experience is related in this OTB post. I’ve twice guest blogged here and am pretty much the whole show over at OTB Sports.
Back to my insurance. Beginning in Feb 1994 I was solely responsible for paying my insurance premiums. They were due the 1st of each month. I would mail payment from South Florida to Jacksonville FL, some 7-10 days before my premium was due by certified mail every month. Some months I would not receive a bill, so I would make a copy of the previous month’s bill and write the correct month on it plus include payment.
Then in January 1995 I got a certified mail on a Friday afternoon. BCBS was informing me they were going to suspend my insurance effective the next Monday and then cancel it a week later. The reason given- failure to pay my premiums.
I had the canceled checks for all my due premiums up through December 1st and had the certified mail return receipt for January. Lack of payment wasn’t an issue. I contacted BCBS offices in Miami and Jacksonville. They requested a copy of all my canceled checks. I mailed them on Friday afternoon along with a copy of the certified mail receipt for January(BTW premiums were due the first of each month but there was also a 10-day grace period before BCBS had the right to cancel. The certified letter I received was mailed January 9th.)
BCBS received the letters of mine, my insurance wasn’t canceled, and I was told the matter was resolved.
Less than three months later I got again another cancellation letter. BCBS then got a volley of missiles back from me. In a terse letter I told BCBS they are to fix their ‘billing problem’ at once, not in 5 minutes, or 10 min, or a half hour, or an hour, etc etc but now. If they didn’t, I would
Consult an attorney for possible legal action
File a complaint with a state regulatory agency
Go to the local news media with my story.
A lawyer friend called BCBS for me, as did a news producer for a west palm beach television station. I got a very apologetic series of phone calls and a letter of apology from BCBS with promises they would take care of the billing issues at once. Which they did, but my business with them was soon finished. A few months later I was able to get on my wife’s insurance thanks to an open enrollment period.
My insurance was about to be canceled but not for non-payment but instead either due to billing department incompetence or something more sinister. The second try at cancellation makes me believe the later.
Bill
I don’t have firsthand experience of such, but I would like to submit the case of Patsy Bates, who won $9 million in punitive damages in arbitration because her policy was rescinded. This is significant because arbitration is notorious for being a business-friendly forum.
Closest I can come is my brother-in-law. He had private insurance for years then got a job with a company that provided insurance. While working there, he had a PE (pulmonary embolus). He lost his job and could not get insurance at any cost. He had assets from working, so could not get Medicare. My wife, an ex-physician spent days trying to help him. We offered to help pay. He got on a two year waiting list for the state high risk pool. He died waiting for insurance, another PE.
Steve
So far these cases presented here do not seem to indicate any systematic problems. We have the following:
A) Problems with idiots in a billing department. Its annoying, and its happened to everyone dealing with some business or other. But, would we have any reason to believe federal bureaucracies wouldn’t produce similar cases?
B) Trouble with an insurer acting badly. But one that was rectified by civil action to the tune of $9 million dollars. Its hard to say the insurance company got away with anything there.
C) An actual case where someone fell through the cracks (based on what is presented here). But doesn’t it seem like we could have a much more modest set of reforms to cover such cases?
I also have never known anyone who had their coverage cancelled, although I have known a couple that had to deal with overly officious insurers…but, once again, I’ve never known the government to be less officious than private business.