Revocation of insurance being fought by victims
When Karen Knee filled out an online application for health insurance four years ago, she scanned her address book and her memory.
She wrote down the names and numbers of her doctors and Business Insurance listed her recent health history — antidepressants after a death in the family, a normal Pap smear and a bladder infection.
She never thought to mention that her back sometimes felt sore after playing soccer or that she’d once taken pain pills after a muscle spasm.
“I’d never been a sick person,” said Knee, 47 of Newport Beach, Calif. “It’s not like I had diabetes and was trying to hide it. These little isolated things, we all have them. It doesn’t mean it’s a chronic thing.”
More than a year later, Knee had accumulated $30,000 in medical bills — the most Business Insurance expensive for removing benign cysts on her scalp. She then received a letter from Blue Cross informing her that the insurer had reviewed her medical records and found that she had not disclosed a pre-existing back condition. As a result, Blue Cross dropped her coverage retroactively and refunded her premiums.
Blue Cross added that had she “given accurate answers” she “would not have been accepted” into a health plan.
It was as if she’d never had insurance. Every bill was now her responsibility.
“When I first got the letter I thought this has to be some mistake because they knew me,” said Knee, who previously had Blue Cross insurance for 10 years. “Health care is a very important part of our lives. If you can’t trust these people, that’s a pretty damn scary way to live.”
Cases like hers — known as rescissions — are drawing increasing scrutiny from state health regulators who have levied million-dollar fines against insurers. In recent months, judges for the Business Insurance first time have begun siding with patients who unwittingly omit information from their applications to purchase individual policies.
The California Department of Managed Health Care is investigating rescission practices at the state’s largest insurance companies after receiving complaints from roughly 180 patients who were dropped from coverage in recent years after requiring expensive treatment.
But the biggest blow so far was a Rancho Cucamonga, Calif., arbitration judge’s February order that Health Net must pay $9 million to a breast-cancer patient who was Business Insurance dropped during her chemotherapy.
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