All insurers are protected against attempts of fraud and a right, if proven fraudulent, to cancel the insurance policy in question. In 26 clear cases the insurer has canceled and denied to pay customers for medical treatment. Not because they were lying and trying to trick the insurer. No, simply because they hadn’t filled out the insurance form correctly.
Does this mean they did something wrong? That the insurers are overly protective against fraud or simply that the insurance forms are made for rocket scientists? One thing is at least for certain; patients are refused treatment! It doesn’t seem to matter if the case is cancer or a question of a broken contact lens.
California officials have now stepped up to the cause with Governor Schwarzenegger commenting the situation as; "outrageous that innocent patients have to live in fear of losing their health care coverage." He later commented further, "I look forward to working with my partners in the Legislature to ensure this egregious practice is stopped."
When almost 95 percent of all insurance acquisitions are made through a collective agreement between an insurance company and for example an employer it is in the remaining 5 percent problems have occurred. People who have attained insurance on their own suffer a greater risk of policy rescissions simply because the individual market is not regulated well enough.
The director of Managed Health Care, Cindy Ethnes, has promised not only to reopen all insurance rescissions made by California’s five major insurance companies but has demanded all 26 rescission policy cases so far to immediately be reinstated. Investigators also fear that these cases simply may be a taste of a much larger insurance consumer cluster not limited to state or insurance company.
Senator and republican presidential candidate John McCain has added further frustration to the issue by arguing for a greater individual insurance market, getting rid of tax incentives for group policies and emphasizing on individual insurance policies. While this might have its advantages there is a concern that it might result in more cases like we’ve seen in California if the individual market isn’t observed and managed properly.
