Insurers rescind rescissions
Insurers stop practice, but critics call it a PR move
Consumer groups are hopeful that health insurers will continue to implement aspects of the new federal health reform law ahead of schedule, and the industry said it is evaluating the provisions on a case-by-case basis.
This past weekend, major health insurers ended the practice of retroactively canceling individuals’ policies after they fall ill—four months before a federal ban on the practice takes effect.
Called “rescissions,” the practice has been a dark stain on the industry and was outlawed in the Patient Protection and Affordable Care Act, effective Sept. 1. Amid fresh reports that rescissions were continuing, and an outcry from members of Congress, major insurers announced last week that, as of May, plans would no longer conduct rescissions.
Insurers have also agreed to begin allowing young adults up to age 26 to stay on their parents’ health insurance policies right away— another of the law’s provisions that goes into effect in September.
In an e-mailed statement, Robert Zirkelbach, spokesman for America’s Health Insurance Plans, representing virtually all health insurers nationwide, said the group’s “members are pleased to be able to implement some new reforms ahead of schedule, and we will continue to look for other opportunities to implement the new reforms in a manner that will minimize disruption and provide greater peace of mind for the more than 200 million people we serve.”
“It’s a step in the right direction,” said Anthony Wright, executive director of Health Access, a California-based consumer group. “We want insurers to do other things in the health reform act early, too, like providing maternity coverage and a basic benefit package.”
Wright added that he’s not overly optimistic. “We’re not holding our breath,” he said.
In truth, because of intense public scrutiny and penalties in recent years, rescissions today are rare. “It is a public relations announcement because insurers had already largely stopped doing this,” Wright said. Still, banning rescissions is necessary, he added. “We feared that once the spotlight drifted away, they would start doing it again.”
WellPoint, UnitedHealth Group and Cigna Corp. all said last week they would stop rescissions, while other insurers, such as Humana and Kaiser Permanente, said company policies are already in line with the new health reform law’s provisions.
In a letter to Democratic House leaders, Karen Ignagni, president and CEO of AHIP, wrote that members would comply with the reform law’s rescission standards starting in
Wright: “It’s a step in the right direction.”