Former Health Insurance Executive Explains How Companies Pocket Billions Through ‘Rescission’
Former Health Insurance Executive Explains How Companies Pocket Billions Through ‘Rescission’
NOTE: This is the first installment of our series — Meet Your Insurance Company Executive: An Interview with Wendell Potter.
Yesterday, ThinkProgress talked with Wendell Potter, Cigna Health Care’s former Communication Director, about a common and widespread practice among insurance companies called “rescission.” As the former Cigna executive explains, rescission is the insurance industry practice of finding reasons — even reasons as flimsy as typos on your enrollment form — to cancel your coverage when you get sick. According to Potter, insurance companies are saving billions by rescinding coverage from Americans who purchase individual insurance:
POTTER: If they determine that you might have left out something that they consider pertinent on your application and might have indicated that you would have had some illness or might get an illness down the road, and you’ve been getting treatment and submitting claims to your insurance company, they will go back and look at that application and they will often rescind or cancel your policy even if you’ve been paying your premiums on-time, every month, for years. You will be left holding the bag with the responsibility of paying all of your medical care when insurance companies do this. They’ve been doing it for many years and saving billions of dollars as a result of this.
Watch it:
The Washington Post recently highlighted other examples of rescission:
Woman Lost Her Home Because Coverage Was Canceled For Condition She Didn’t Have. “For Teresa Dietrich, it was fibroids. The Northern California real estate agent was left to pay $19,000 after Blue Cross said she did not disclose a diagnosis of the benign uterine tumors. But Dietrich said the doctor who had written ‘fibroids’ on her medical record never mentioned his suspicions to her. The bills destroyed her credit and cost her her home – and, in a comically cruel twist, the surgery proved the doctor was wrong. ‘They said I had a condition I didn’t even have,’ Dietrich said. ‘And they canceled me.’”
Woman Saddled With $25,000 Debt For Not Disclosing Condition She Didn’t Know She Had. “The untimely disappearance of Sally Marrari’s medical coverage goes a long way toward explaining why insurance companies are cast as the villain in the health-care reform drama. ‘They said I never mentioned I had a back problem,’ said Marrari, 52, whose coverage with Blue Cross was abruptly canceled in 2006 after a thyroid disorder, fluid in the heart and lupus were diagnosed. That left the Los Angeles woman with $25,000 in medical bills and the stigma of the company’s claim that she had committed fraud by not listing on a health questionnaire ‘preexisting conditions’ Marrari said she did not know she had.’”
Woman Denied Coverage For Gall Bladder Surgery Because Of Husband’s High Cholesterol. Washington Post: “In a pending case, Blue Shield searched in vain for an inconsistency in the health records of the wife of a dairy farmer after she filed a claim for emergency gallbladder surgery, according to attorneys for the family. Turning to her husband’s questionnaire, the company discovered he had not mentioned his high cholesterol and dropped them both. Blue Shield officials said they would not comment on a pending case.”
Rescission is widespread – an investigation by the House Subcommittee on Oversight and Investigations found that three insurance companies alone (WellPoint, UnitedHealth and Assurant) cancelled more than 20,000 policies in the last five years.
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And lets not forget this preexisting condition.
September 15th, 2009 at 3:53 pmhttp://www.huffingtonpost.com/2009/09/14/when-getting-beaten-by-yo_n_286029.html
Ohhh, so THIS is the system the teabaggers and 9/12ers are fighting to protect.
What a worthy cause indeed.
September 15th, 2009 at 3:54 pmThey are not in the business of providing health care insurance, that’s just a ruse. They are in the business of making money… like so many companies do now days.
September 15th, 2009 at 3:54 pmFormer Health Insurance Executive Explains How Companies Pocket Billions Through ‘Rescission’
– - 9/12err: “And everyone knows that God damn Obama crippled the economy and done led us into this Rescission!”
September 15th, 2009 at 3:56 pmShameful, just shameful, that so many on the right are fighting for the insurance companies’ ability to continue these kind of practices, to take advantage of vulnerable, sick people and exacerbate their suffering.
September 15th, 2009 at 3:56 pmWho would have guessed that a$$h0les run the insurance industry? I’m shocked. /snark
September 15th, 2009 at 3:57 pmThis is immoral. These “health” insurance companies are nothing but a bunch of criminals. Something has to be done this year!
September 15th, 2009 at 3:57 pmThe whole scheming, lying, thieving health insurance industry should be dismantled in favor of a more humane and less costly single payer system.
September 15th, 2009 at 3:57 pmGod. These people are EVIL.
September 15th, 2009 at 3:57 pmProfit motive run rampant!
This kind of abomination is what happens when everyone from the CEO on down forgets the true mission of their business and ignores customer requirements.
This is how we got the housing bubble, the credit bubble and that other abomination known as the republican party.
September 15th, 2009 at 3:58 pm#5 trollspotter,
And it’s just so Christian too. /snark
We are not a Christian nation. Period!
September 15th, 2009 at 3:58 pmFormer Health Insurance Executive Explains How Companies Pocket Billions Through ‘Rescission’
Oh yeah, I know how this works. I am a ‘former customer’ (read: victim) of United Health.
I believe in karma, so may the FSM take a giant dump on UHS executives.
September 15th, 2009 at 4:00 pmThe name for this activity is too nice-sounding. How about we call it “palining”? Any better terms?
September 15th, 2009 at 4:01 pmThere’s nothing that can be said on this thread that hasn’t been said before.
We need reform.
September 15th, 2009 at 4:02 pmThe Democrats need to start pouring money into ads that tell these kind of stories, because the conservative owned and controlled MSM is never going to report on them. Once the public realizes that the for-profit health insurance companies are already doing to them what they are saying a public plan would do to them, they will change their minds very quickly.
I have my perfect comeback when someone says they don’t want to have access to a public plan. I ask them which place they would rather see their health care dollars go (either through taxes or premiums), to subsidizing the lavish lifestyles of for-profit health care executives or to actually go towards providing them health care. I then tell them the difference in what Medicare pays in overhead vs. what the for-profit health insurance industry pays. I have as yet had anyone I tell this to have a coherent answer.
September 15th, 2009 at 4:08 pmYe gods — how in the world did our health system get so incredibly f**ked up? And why are there still people out there who think nothing needs to change?
Oh. Right. Those would be the people who are in the health industry making money hand over fist. PLUS all the people too naive to think that they could ever get sick, lose their job, get rescinded, etc.
September 15th, 2009 at 4:10 pmdixie blood says:
Who would have guessed that a$$h0les run the insurance industry? I’m shocked. /snark
The right isn’t in the least bit concerned about these kind of crooks. But, find a couple of crooked employees of ACORN and that’s a major story and a threat to our very existence.
September 15th, 2009 at 4:10 pmkwsventures,
If this is not your company, listed below, then I have a feeling they would like for you to stop using their company name.
Care to comment and tell the truth for a change?
September 15th, 2009 at 4:11 pmSlime.
September 15th, 2009 at 4:11 pmThe Dems had better support the Public Option, or they will permanently lose the support of the progressives.
They will not get a second chance.
If they fail to act, we need to immediately organize a movement via the Green Party to challenge every Dem and every repiggie possible, especially the repiggies, and get that goddamned garbage out of any position of responsibility for the foreseeable future.
September 15th, 2009 at 4:11 pmThe R’s support
Bankruptcy Panels.
and
Death Panels.
That’s why their plan is better.
Oh – and it also costs more. So it’s actually WAY better.
September 15th, 2009 at 4:12 pmFort Walton Beach in Florida is awash in holy roller and mormon repiggies.
September 15th, 2009 at 4:12 pmmisscoleopteramolly says:
Ye gods — how in the world did our health system get so incredibly f**ked up? And why are there still people out there who think nothing needs to change?
Because, of the the 85% out there who have health care coverage, most have never had to use it beyond routine doctor visits and an occasional trip to the emergency room. They have no idea what is awaiting them if they ever really to use their insurance.
My daughter, who is a Bankruptcy Attorney could tell you hundreds of horror stories similar to these. She says that 80% of her bankruptcies have unpaid medical bills as a factor and that over 50% have unpaid medical bills as the reason why these people have to declare bankruptcy.
September 15th, 2009 at 4:13 pmevangenital says:
If they fail to act, we need to immediately organize a movement via the Green Party to challenge every Dem and every repiggie possible, especially the repiggies, and get that goddamned garbage out of any position of responsibility for the foreseeable future.
Rather than using the Green Party, I would like to see Progressives start their own new party and call it the Progressive party. With the Internet and the organizing ability of so many who helped Obama get elected, I’m fairly sure that we could successfully launch a new party and pull all the Progressives and Liberals away from the Democratic party.
September 15th, 2009 at 4:15 pmFor anyone who thinks a “trigger” on a public plan is a good idea because health insurance companies will willingly clean up their practices…forget it. Public option now. I don’t want my money going to these crooks AT ALL. If I could cash out on the health insurance we get at work and pay for my own healthcare, I would, just to keep money out of their greedy, slimey, claws.
September 15th, 2009 at 4:16 pmThe insurance execs must be sitting back and laughing their asses off at the stupid people who are protesting on their behalf.
September 15th, 2009 at 4:20 pmThis comment has been voted down. Click to read.
The next obvious step in this protocol is for the independent Americans to realize that if they would just sell their organs the insurance companies would give them a good price and we would have a way to diminish the organ transplant problem.
Come on, Amuricans, why do you need two kidneys? A complete liver? Profit is to be made. Quit being so selfish.
September 15th, 2009 at 4:22 pmCampy’s afraid of Voter Registration, too?
Wonder what else frightens him.
September 15th, 2009 at 4:23 pmBilbo, go check out fightingbob.com. There is a progressive base.
September 15th, 2009 at 4:25 pmCampesino says:
I’ve looked all through your post and I can’t find any reference to the horrible practice of rescission… the topic of this thread?
Why is that?
September 15th, 2009 at 4:25 pmBut Campy – What does your long-winded cut-and-paste have to do with
Insurance Companies cancelling coverage and bankrupting people?
kan u nawt reed gud?
September 15th, 2009 at 4:25 pmYou GO Wendell!
Tell all…so that the baggers, deathers, birthers, tenthers, loonyers…can all practice “rescission” on the truth!
September 15th, 2009 at 4:28 pmJust last week, prosecutors in Miami-Dade County, Fla., arrested 11 people for falsifying hundreds of voter applications during a registration drive last year. ACORN tipped the authorities off to the problem.
Why do Republicans love voter fraud so much?
September 15th, 2009 at 4:34 pmbelaccifer lacca says:
Campesino says:
I’ve looked all through your post and I can’t find any reference to the horrible practice of rescission… the topic of this thread? Why is that?
Because the Republics have nothing to fight back with, since they have nothing at all. So they think they can use a few bad apples being employed by ACORN as a top rated national emergency that needs immediate attention. They think those few bad apples are much more important than the 47 million Americans who have no access to health care. Just shows you where their priorities are.
September 15th, 2009 at 4:36 pm***
#27,
Campesino says:
“I’ve looked all over this site and can’t find any reference to the ACORN scandal? Why is that?”
*
baker56 says:
This comment has been voted down. Click to read.
WHERE’S YOUR ACORN STORY? I CAN’T FIND IT
September 14th, 2009 at 12:31 pm
**
different assho|e,
same old shi†.
:|
September 15th, 2009 at 4:38 pmCorporations cash in on the life insurance policies they take out on employees too.
They call it “Dead peon insurance”.
September 15th, 2009 at 4:38 pmThis comment has been voted down. Click to read.
I just get the urge to reciss some insurance company executive gonads now and then.
September 15th, 2009 at 4:40 pmJoe,
The Fluffers have their orders.
If they fail at erecting the false flag,
there’ll be no nickels for them.
September 15th, 2009 at 4:40 pmaaronk says:
ahh….this is just one bad apple. Every organization has them right….like ACORN?
Care to comment on rescission here, aaronk? Since you’re ignoring it in the thread below and it is the topic of this one and everything…
September 15th, 2009 at 4:40 pmaaronk says:
ahh….this is just one bad apple. Every organization has them right….like ACORN?
September 15th, 2009 at 4:39 pm
______________
I’m still not seeing wht ACORN did wrong. They helped a guy fill out tax forms and buy a house. Would you prefer that pimps NOT pay income tax?
September 15th, 2009 at 4:42 pmhttp://articles.latimes.com/2009/jun/17/business/fi-rescind17
Bonuses for ‘bad apples,’ aaronk?
September 15th, 2009 at 4:42 pmNo surprise seeing Righties opposed to voter registartion.
Everyone knows that higher turnout = more D wins.
Keep fluffin’ though, fellas – it’s funny to watch.
September 15th, 2009 at 4:46 pmaaronk says: ahh….this is just one bad apple. Every organization has them right….like ACORN?
You forgetting Ney, Safavian, Cunningham etc etc etc?
By your logic all federal campaign funding for GOP should be halted, right?
September 15th, 2009 at 4:48 pmKeep posting aaron so we can all see how woefull stupid you are.
September 15th, 2009 at 4:49 pm1993 health insurance companies paid 95% of claims
2007 health insurance companies paid 80% of claims
There is no reason other than greed and arrogance.
Just wait till they get everyone’s genome—then they can decline anyone they want, because EVERYONE will have some sort of pre-existing condition!
September 15th, 2009 at 4:50 pmPlease give to Karen Ignagni, 880 billion is a mere pittance of taxpayer dollars, and she needs a new Boeing corporate jet with gold plates dinner and silverware while on those highly stressfull junket flights to foreign vacation spots.
Defend Wellpoint!
September 15th, 2009 at 4:50 pmLet me give you a little insight on how these same insurances get back at the pharmacies.
September 15th, 2009 at 4:51 pmI recently had a “random” audit for my pharmacy by two different insurance companies utilizing the same 3rd party auditor (which gets reimbursed for any reversal of payment).
We were audited for #30 “random” Rxs each, needing all the pertinent (and tedious) information, going back almost 3 years.
Well, lo and behold, the “random” audit consisted of only my high dollar items. Now, I do 60% generics, but out of 60 Rxs requested, NOT ONE was generic.
Months had passed, and insurance “A” found no fault, while insurance “B” found unsubstantiated “errors” on all Rxs, and was going to take away $13,000 from my remittance checks.
The kicker? Both were reviewed and submitted in the EXACT SAME FORMAT requested.
I have subsequently appealed insurance “B” results, and the case is still pending.
Bottom line, the insurance company is basically stealing from us, claiming that since their ridiculous audit steps weren’t followed to the exact T, the Rx dispensed is non existent, thus it was never filled, and we are to be penalized.
It’s bull$hit.
But we are just a small business, imagine what a multi million dollar pharmacy would have to face.
It wasnt a pimp but conservative activists posing as pimps and prostitutes
September 15th, 2009 at 4:52 pmbelaccifer lacca says:
——————————————————————————–
http://articles.latimes.com/2009/jun/17/business/fi-rescind17
Bonuses for ‘bad apples,’ aaronk?
September 15th, 2009 at 4:53 pmA few bad apples? Like Acorn? Every buisness has some that will push the legal issue. But the insurance industry is the worst.
But Keith – Don’t forget that during that same period, the cost went up and up and up too…
…that’s how we know for sure that we’re Free.
How could we give that up??
September 15th, 2009 at 4:53 pmmakete says:
Read the article, makete… this isn’t bad apples, this is standard practice and it is coming from the top down.
And it is wrong.
You guys really wanna defend it?
September 15th, 2009 at 4:55 pmI was talking to the idiot who posted about acorn and the problem that a few posed for them.
September 15th, 2009 at 4:57 pmDrxJ,
Good luck. What a bunch of thieves.
September 15th, 2009 at 4:58 pmmakete says:
I was talking to the idiot who posted about acorn and the problem that a few posed for them.
Oh, I apologize. I misunderstood…
September 15th, 2009 at 4:58 pmCampesino says:
You ignorant brainwashed trolls have all been programmed like the mindless stupid sheep you are to keep spamming every site with your ignorant ACON BS. Just STFU until you can grasp the concept of a topic you ignorant mindless shitweasel
September 15th, 2009 at 4:58 pmI was afraid that would happen. Misunderstandings are the crappers.
September 15th, 2009 at 4:59 pmAnd yet, according to a story by Karl Vick in the September 8, 2009 issue of the Washington Post:
In the past 18 months, California’s five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.
Officials from three insurance companies told a House Energy and Commerce subcommittee this summer they had saved $300 million by canceling about 20,000 policies over five years.
September 15th, 2009 at 4:59 pmDRxJ says:
It’s bull$hit.
But we are just a small business, imagine what a multi million dollar pharmacy would have to face.
September 15th, 2009 at 4:51 pm
_____________
I’d assume a lot less, actually. A multimillion-dollar pharmacy can lawyer up and fight back, whereas the little guys are easy pickings for the insurance industry.
September 15th, 2009 at 4:59 pmaaronk says:
shove it up your tarhole you mindless moron. ACORN is not the topic of this thread. Stop being an ignorant punkass troll
September 15th, 2009 at 5:02 pmMost of the ‘baggers don’t have these problems. They are old enough to be covered by Medicare.
September 15th, 2009 at 5:04 pmUnited Healthcare Group CEO Stephen Hemsley collected $744,232,068.00 in unexercised stock options in 2008. He is expected to get over $200 million in 2009. Source: Forbes Magazine
September 15th, 2009 at 5:04 pmSo campesino, even you cannot defend the industry’s practices of rescission so you have to resort to bait and switch?
September 15th, 2009 at 5:05 pmaaronk says:
This comment has been voted down. Click to read.
ahh….this is just one bad apple. Every organization has them right….like ACORN?
You can’t defend the practice of rescission so you seek to delude us into believing it’s one rogue company that engages in it? ACORN is not the topic, and for a “corrupt organization,” they sure did deal with those caught in the sting. How about we go undercover and pull the same sting operation on these insurance company executives? Perhaps then you can see that you have been blinded by your corporate overlords.
September 15th, 2009 at 5:07 pmWhat a racket…
September 15th, 2009 at 5:08 pmCampesino says:
This comment has been voted down. Click to read.
I’ve looked all over this site and can’t find any reference to the ACORN scandal? Why is that?
Because you are illiterate. There’s a reference to it in every thread today, posted by retarded wingnuts like yourself.
But let’s go over what we know so far. After massive amounts of investigations funded by the right wing, this is what has been able to be discovered about ACORN:
1. ACORN has been attacked for taking the step of identifying likely fraudulent voter registration cards to their state elections boards. Other voter registration groups, which do not take this step, were not attacked because the number of their fraudulent registrations remains unknown.
2. ACORN has been cheated by some of their workers, who filled in fraudulent voter registration cards instead of finding new voters.
3. After a massive search by private investigators to find undocumented immigrants registered by ACORN, two possibilities were identified; both were harrassed by the P.I., and it later turned out that they were both U.S. citizens anyways.
4. After a massive hidden-camera sting operation searching for corrupt ACORN employees, one was found who was willing to give advice for how to fill out a housing form even though the applicants engaged in illegal activities irrelevant to whether they needed housing assistance to begin with.
5. Due to unfounded allegations by wingnuts, Congress decided to make sure ACORN doesn’t get funding. Not that had they ever received federal funding anyway. Note that this does not count as illegal or questionable activity by ACORN, but rather merely as a marker of success of the wingnut slander against them.
In all of these examples (and probably more I can’t think of) ACORN was the victim. As an organization, they do good work for communities across America. The attempts to smear them have resulted in no evidence whatsoever that they are doing anything illegal.
Here’s an analogy, though. Recently a patron of McDonald’s received a gun and drugs at their drive through, in addition to their regular order. Does that mean that McDonald’s is a gun-running drug-pushing organization? To use your “ACORN logic,” yes, and McDonald’s should be federally investigated because of this event. But a normally intelligent person would point out that one employee willing to commit a crime does not discredit the organization they work for.
… or at least, not when that’s a private company, as opposed than a non-profit organization that helps underserved communities, right?
Which (finally) brings us back to the health insurance companies. Their behavior as an organization, whether it’s presently criminal or not, should be. It doesn’t matter if I find one worker for a health insurance company who cheated. I could find that in any company or organization, if I looked as hard as the wingnuts are looking at ACORN, and you know it. What matters is the established practices of the organization as a whole. The policies of the insurance organization do nothing to serve consumers or the country; the practices of ACORN do.
.
aaronk says:
ahh….this is just one bad apple.
Actually, he’s explaining how the industry as a whole works. TP followed it with three examples of standard procedures.
I’d like to direct your attention to Krazy’s link at #1:
Feeling very proud to be a Republican now?
September 15th, 2009 at 5:09 pmHmmmm… Death Panels…. Check, we already got ‘em. Hey Sarah Palin , a day late and a dollar short on the Death Panels, ex-govenorquitter hide the babies and Granny!
September 15th, 2009 at 5:13 pmRescission is nothing more than payola in the CEOs pocket.
These people dont deserve ANY subsidies. They should be restricted from ever getting A penny of tax dollars
September 15th, 2009 at 5:15 pmACORN pales in comparison to Grannies private IV Yankers
September 15th, 2009 at 5:17 pmRescisson will be Illegal under all the bills being considered by congress.
The only way the insurance companies can keep doing it….is to Kill The Bill.
September 15th, 2009 at 5:19 pmNext thing you know, being born by virtue of prenatal care covered by the insurance companies will be a pre-existing condition…
September 15th, 2009 at 5:20 pmIf you live in places where well water is polluted by big business.
Pre-existing condition!
If you live near an airport.
Pre-exister!
Ever had a wart?
Pre-exister!
September 15th, 2009 at 5:29 pmThe only way the insurance companies can keep doing it….is to Kill The Bill.
I think that is Baucus’ intention
September 15th, 2009 at 5:33 pmDRxJ,
September 15th, 2009 at 5:38 pmI work at one of the largest retailers in the country, and they do it to us, by sending all their EOBs on paper, deducting what appears to be random rxs and hoping we have too many reams of paper to go through to catch it.
Forcing their asses to go electronic is going to cost them millions in hidden takebacks.
I feel for all these people, but this doesn’t shock me in the least. They are called “for-profit” companies for a reason, profit is their bottom line. If we can’t make them “non-profit,” than we need to give them some competition thru a public option.
September 15th, 2009 at 5:49 pmIf a Swiss Insurance Co. doesn’t pay your claim within 5 days, your next month’s Insurance Premium is FREE. That’s a For- Profit Swiss Insurance company operating under Humane Insurance Laws.
All Claims get Paid in Switzerland. Medicare too.
September 15th, 2009 at 5:56 pm****
health insurance lobby spend 700k
per day to block health care bill.
**
h/t dailykos
:|
September 15th, 2009 at 6:29 pmum, they told her not to file a return to avoid taxes….I think that qualifies as “wrong”
September 15th, 2009 at 10:26 pmagain, Aaron, you try to avoid the topic of conversation here by trying to shift our attention away from the scandalous practices of the health care industry. Do you support the practice of rescission or not?
September 15th, 2009 at 11:42 pmaaronk says:
um, they told her not to file a return to avoid taxes….I think that qualifies as “wrong”
I guess the litmus test of whether an organization is behaving in a criminal fashion or not is how they respond when wrongdoing by their employees is brought to their attention. So how do the insurance companies respond when their employees find similarly creative ways to avoiding paying claims? Do they fire them as ACORN did? No, they give them bonuses.
If you want to discuss a criminal enterprise, I suggest you stay on topic.
September 16th, 2009 at 1:02 amaaronk says:
um, they told her not to file a return to avoid taxes….I think that qualifies as “wrong”
September 15th, 2009 at 10:26 pm
____________
Really? That’s funny – I thought you teabaggers opposed taxes. Now suddenly you’re all for them?
Make up your minds already!
September 16th, 2009 at 7:38 amThank you for your sharing.!
September 19th, 2009 at 4:43 am