Perspectives in capitalism

The cheap tricks private health insurance companies sometimes use to screw the rest of us... This one is called 'rescission'.

A House oversight subcommittee took a close look at a particularly shameful practice known as “rescission,” in which insurance companies cancel coverage for some sick policyholders rather than pay an expensive claim. The companies contend that rescissions are rare. But Congressional investigators found that three big insurers canceled about 20,000 individual policies over a five-year period — allowing them to avoid paying more than $300 million in medical claims. The companies typically argue that the policyholders withheld information about pre-existing conditions that would have disqualified them from coverage. But the subcommittee unearthed cases where the pre-existing conditions were trivial, or unrelated to the claim, or not known to the patient. When executives for the three companies were asked if they would be willing to limit rescissions to cases where the policyholder deliberately lied on an application form, all said they would not. This tactic will not be ended voluntarily.