By Kelly Montgomery, About.com Guide to Health Insurance since 2005
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Thursday June 18, 2009
At a Congressional hearing about retroactive cancellation, or rescission, of health insurance policies, health insurers refused to discontinue this practice. According to the Los Angeles Times, insurers believe that this practice is absolutely necessary in order to reduce fraud. However, even when lawmakers allowed for situations where policyholders willfully or intentionally lie, the insurers would not agree to stop.
Both Democratic and Republican lawmakers condemned rescission as "unfair and abusive." In some cases, evidence showed that insurance adjusters were rewarded if they could find a way to cancel insurance policies, even in cases where there was no apparent fraudulent behavior. Some reform leaders used the insurers' position to bolster their argument in favor of including a public insurance option in any health reform package.
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