WASHINGTON BUREAU — The leaders of three House committees today asked health insurers for an immediate end to most coverage rescissions.
The new “Affordable Care Act” – the package that includes the new Patient Protection and Affordable Care Act and the new Health Care and Education Reconciliation Act – will ban rescissions of health coverage 6 months after plan years starting after Sept. 23.
A rescission is an act to rescind, or terminate, an in-force health insurance policy.
If health insurers were to stick to the letter of ACA when implementing the rescission ban, most rescission bans would take effect Jan. 1, 2011, because most plans have calendar-year plan years, a health insurance industry official says.
Key House committee leaders have sent a letter asking major carriers to implement the ban 6 months ahead of schedule.
The letter has gone out to the chief executives of Aetna Inc., Hartford (NYSE:AET); Assurant Inc., New York (NYSE:AIZ); Humana Inc., Louisville, Ky. (NYSE:HUM); Kaiser Permanente, Oakland, Calif.; UnitedHealth Inc., Minnetonka, Minn. (NYSE:UNH); WellPoint Inc., Indianapolis (NYSE:WLP); and the Blue Cross and Blue Shield Association, Chicago.
The letter was signed by Rep. Sander Levin, D-Mich., chairman of the House Ways and Means Committee; Rep. Henry Waxman, D-Calif.; chairman of the House Energy and Commerce Committee; and Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee.
The chairman of the health subcommittees of the committees also signed the letter.
In the letter, lawmakers urge carriers to end use of rescissions except in cases involving cases of fraud or material misrepresentation.
Lawmakers ask that carriers submit any decisions to rescind or cancel a policy to reviews by independent, outside parties.
“Under such a procedure, no individual health insurance policy should be rescinded until the review confirms that fraud or material misrepresentation has in fact occurred,” lawmakers write.
Implementing the rescission component would ACA early would be consistent with carriers’ announcement that they will act early to give graduating college students the ability to stay on their parents’ health coverage up to age 26, lawmakers write.
Aetna has responded with a statement noting that it updated its rescission policy in 2008.