Insurance Companies Decide to Cease Rescissions

Posted in Health Insurance

May 5th, 2010

It seems that some health insurers have decided to jump on board with the rules and guidelines put in place by health care reform before expected. Recently a couple of health insurance companies have announced that they will officially cease rescissions before the official restriction takes place in September.

What is a Rescission?

If you’re not familiar with the word rescission, it references the act of a health insurance company to revoke an insurance policy after an individual has already been insured. The reason for revoking the policy, however, is not due to a malicious act by the policyholder.

Instead, it is because the insurer discovers that the policyholder has gotten sick then combs through medical records to find some type of preexisting condition – a good enough reason to cancel the policy.

The act of rescission is a major issue for health care reform and a major factor in the health care law. Now that the bill has passed, health insurance companies have a short amount of time to change their policies and begin abiding by the new law.

Some Insurance Companies Changing Now

In a pledge to begin treating patients fairly, a couple of major health insurance companies and a trade group that represents other plans have decided to start abandoning the act of rescission before September. Recently, Karen Ignagni of America’s Health Insurance Plans sent a letter to U.S. House Democrats noting that the industry was taking steps to make changes.

This would make sure that “individuals and families will have greater peace of mind when purchasing coverage on their own,” she wrote.

The step made by insurers could indeed help individuals and families feel secure about their options when it comes to health insurance. Hopefully these health insurance changes are just a few of the many to come in the near future.