It was only last month that the government passed a massive health care reform bill but it is already having some serious effects on the market.
According to Reuters, UnitedHealthcare announced yesterday that it will no longer drop coverage for customers after they get sick as of May 1. Under the health care bill, insurers have until Sept. 23 to make that change, but UnitedHealthcare decided not to wait.
"In the spirit of the recently passed health reform legislation, UnitedHealthcare moved quickly to eliminate the practice of rescission, except in cases of fraud or intentional misrepresentation of material fact," UnitedHealthcare President Gail Boudreaux said in a statement, according to Reuters.
This tactic, known as rescission, has been used by several insurance companies including Aetna and WellPoint as a cost-cutting measure. As we’ve reported in the past, when health care providers notice you are seeking coverage for expensive procedures, they may start hunting for an excuse to cancel your plan. The excuse can be something as small as a typo on a health form. But recently, WellPoint came under fire when a Reuters investigation revealed they were applying this tactic and using “computer algorithms to target women with breast cancer” in order to cancel their coverage.
Most of the changes resulting from the health care bill will take effect in 2014, but a couple provisions are taking effect sooner. By September, insurance companies will no longer be able to deny coverage to children because of pre-existing conditions. Unfortunately, the insurance industry is reportedly already trying to find a loophole to avoid following this law. So we can only wonder how these companies might try to find excuses to continue their rescission policy. As it stands, the health care bill does allow insurance comes to drop coverage in cases of "fraud or intentional misrepresentation."
For now though, it certainly seems like insurance companies may actually start to function as a health care providers and not health care deniers.
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