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.