Nor must the applicant-subscriber have ever been aware of the existence of the condition upon which the rescission decision was made. For example, one of the witnesses at the hearing was 59-year-old Robin Beaton of Texas. She had purchased a plan from Blue Cross Blue Shield. A dermatologist had misdiagnosed acne as precancerous, but had also never informed Beaton of the diagnosis, thus making it impossible for her to include it in BCBS’ application for insurance. Yet when Beaton was later correctly diagnosed as suffering a virulent form of breast cancer, BCBS used the omission as grounds to deny coverage. That, the insurance did on the Friday that preceded the Monday she was scheduled to undergo a double mastectomy!
Another example was the late Otto Raddatz, of Illinois; represented on the panel by his surviving sister Peggy. Suffering from an aggressive non-Hodgkins lymphoma, Otto’s best hope was the costly stem-cell transplant the team of oncologists prescribed. He had only a three-week window durng which the transplant would be effective. However, upon receiving the request for authorization from the health providers, the insurance company, Fortis, rescinded his insurance policy. On his application for insurance, Mr. Raddatz erroneously indicated he had at some distant time in the past suffered gall stones. Never had he actually suffered gall stone difficulty, regardless, as he had included it in his application, Fortis proceeded to issue the policy, and collect insurance premiums, on the supposition that in fact he had. But when Fortis anticipated paying the expensive claim for a stem-cell transplant, the company used a minor notation a long-ago doctor had made in Otto’s chart that he had kidney stones — a condition Otto was neither treated for or even informed of by the physician — to rescind his policy, and to thereby damn the fellow to hopelessness and death.
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Three insurance company CEOs followed the victims of insurance company abuses as witnesses: Don Hamm, of Assurant Health; Richard Collins, of Golden Rule; and Brian Sassi, of Wellpoint health Networks. Before the subcommittee members, all of whom expressed outrage over the industry’s loathsome post-claims underwriting practices, the CEO-witnesses attempted to defend what is to most wholly indefensible. All posited post-claims underwriting was an essential and legitimate tool for rooting out fraudulent health insurance applicants. All went so far as to defend using preexisting conditions the applicant may never have been aware of, or informed of, or of application questions that definitely seemed to be designed to be confusing to the applicant, and preexisting conditions that were (unknown to the insured and therefore not disclosed by the insured) completely irrelevant to the specific treatments being sought, as grounds for rescission.
Chairman Stupak read a question from Assurant’s application to CEO Hamm, then asked the executive to tell the committee what that “Have you ever had _____?” was referring to, “What is that, can you tell us?” The CEO of the company did not know the answer, and replied that he did not know.
The evidence here so strongly suggests that at least one of the purposes of the insurance application is to provide a basis for later rescission of the contract that it deserves reiteration. The insurance company president, under oath, asserted that he had no idea how he could have answered one of the questions on his own company’s application for insurance!
The CEOs also testified that rescission was relatively rare. That of course depends on how one defines “relatively rare.” The House report that studied thousands and thousands of cases where claimant’s claims had been denied and experienced their policies cancelled paints a different picture altogether.
The Republican members of the committee asserted that the healthcare delivery miasma that is the US model can and should be reformed with no “government option” being a component of the reform. The feelings of the Democratic members were summed by Chairman Stupak, “Some of us on the other side see it differently.” President Obama has insisted that a “government option” be part of any reform, to among other things, “keep the industry honest.”
Every one of us must decide which port we feel offers us the greatest safety, for the most affordable price. For me the decision is easy, because the evidence is preponderant, and because the coldly calculating dollars-above-all-else reactions and responses by the industry CEOs to the plight of the witness-victims of inexplicable, amoral industry policies vividly recalls, “The horror, the horror.”
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