Rescission

A follow-up to yesterday's post: 

The way insurance companies make a profit is by accepting the money you or your company pays them for your policy, and then denying you care when you actually need it. This is understandable, from a business point of view. It is of course inhuman, from a moral point of view. 

They've perfect many forms of this horrific practice, but perhaps the worst of all is rescission. 

Blue Cross of California encouraged employees through performance evaluations to cancel the health insurance policies of individuals with expensive illnesses, Rep. Bart Stupak (D-Mich.) charged at the start of a congressional hearing today on the controversial practice known as rescission.

[...] one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.

WellPoint's Blue Cross of California subsidiary and two other insurers saved more than $300 million in medical claims by canceling more than 20,000 sick policyholders over a five-year period, the House committee said.

"When times are good, the insurance company is happy to sign you up and take your money in the form of premiums," Stupak said. "But when times are bad, and you are afflicted with cancer or some other life-threatening disease, it is supposed to honor its commitments and stand by you in your time of need.

"Instead, some insurance companies use a technicality to justify breaking its promise, at a time when most patients are too weak to fight back," he said.

The committee investigation uncovered several rescission practices that one lawmaker called egregious, including targeting every policyholder diagnosed with leukemia, breast cancer and 1,400 other serious illnesses. Such investigations involve scouring the policyholder's original application and years' worth of medical and pharmacy records in search of any discrepancies.

In November 2007, The Times reported that insurer Health Net Inc. paid bonuses to employees based in part on their involvement in rescinding policyholders. According to internal corporate documents disclosed through litigation, Health Net saved $35 million over six years by rescinding policyholders. The disclosures were part of the evidence that led a private arbitration judge to levy $9 million in damages against Health Net in a case involving the company's rescission of a woman diagnosed with breast cancer.

You want to talk about death panels? There's your death panel, right there. The difference is, this one is real. And it's the way the system is designed.