Ban on Rescissions????

[Junkdrawer]

Anyone who saw Sicko knows what "rescission" is. If you haven't heard here's an example in practice:

Firm cancels health insurance coverage for girl, 17, after celiac disease diagnosis

When 17-year-old Brianna Rice was diagnosed with celiac disease in February, she had health insurance.

She doesn't now.

In the months that followed her diagnosis, her insurance company, American Community Mutual Insurance, combed through her medical records and ruled that her parents lied on her application last year.

In May, American Community not only canceled her policy, but also rescinded coverage all the way back to the day it started -- Nov. 1.

Her parents, Dale and Pat Rice of Deerfield, insist they were truthful on Brianna's application and say the insurance company is trying to back out of covering their daughter because of the February diagnosis.

American Community disagrees, saying that if the Rices had given the company Brianna's full heath history when they applied for coverage, it would never have been granted.

...

http://www.chicagotribune.com/health/chi-thu-problem-briana-rice-sep17,0,771811.column

So, now we're told that one of the immediate benefits of this HCR bill is that the practice of "rescission" will end. Or will it? I looked up the verbiage in the bill. Here it is:

‘‘SEC. 2712. PROHIBITION ON RESCISSIONS.

‘A group health plan and a health insurance issuer
offering group or individual health insurance coverage
shall not rescind such plan or coverage with respect to an
enrollee once the enrollee is covered under such plan or
coverage involved, except that this section shall not apply
to a covered individual who has performed an act or prac-
tice that constitutes fraud or makes an intentional mis-
representation of material fact as prohibited by the terms
of the plan or coverage. Such plan or coverage may not
be cancelled except with prior notice to the enrollee, and
only as permitted under section 2702(c) or 2742(b).


http://democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf

Now, read that first article again. "Fraud" is exactly what the insurance company claimed was the reason for recinding coverage. It always is. So how does prohibiting rescission "except in cases of fraud or intentional misrepresentation of material fact" change anything?

[WCGreen]

1. Good point....

[Better Today]

My first thought is that there might be a section that defines

"act or practice that constitutes fraud or makes an intentional misprepresentation of material fact as prohibited by the plan or coverage."

[high density]

2. Pre-existing conditions will be covered.

Insurance will be forced to allow pre-existing conditions which makes the reason for this recission moot to begin with. Right?

[GrantDem]

3. They rescinded due to a so-called pre-exisiting condition.

This is now banned as well.

[sandnsea]

4. With pre-existing conditions gone

There won't be any reason to lie on an application.

But there could still be instances where people try to pretend they're younger or a relation who has insurance or whatever other course of true fraud that could exist.

These companies are going to be watched by the insurance exchanges. They won't get away with cheating patients and being allowed into a government exchange.

[Nikki Stone1]

5. Exactly. The rescission loophole.

.

[cynatnite]

6. I thought an independent appeals board would be used for this kind of thing...

I think Obama might have said this a few days ago, but I'm not sure.

[Unvanguard]

7. Because it means that the insurance company must actually substantiate its claim.

If people actually commit fraud, it might well be fair to cancel the policy.

[eridani]

8. except that this section shall not apply to a covered individual who has performed an act --

--or practice that constitutes fraud or makes an intentional mis-representation of material fact as prohibited by the terms of the plan or coverage.

Am I the only one to see a loophole big enough to drive a truck through here?

[Junkdrawer]

9. No. I really was hoping someone could show where this provision had teeth....

but it sure doesn't look that way.