One of the worst practices of private health insurance companies is rescission, a process in which insurers use any reason they can to cancel coverage when a person gets sick. As former Cigna executive Wendell Potter explained to Think Progress, “[The insurers have] been doing it for many years and saving billions of dollars as a result of this.” Today, the Huffington Post reports that the insurance company Fortis, now known as Assurant, been ordered by the state of South Carolina to pay $10 million for wrongly revoking the insurance policy of an HIV-positive college student:
The South Carolina Supreme Court has ordered an insurance company to pay $10 million for wrongly revoking the insurance policy of a 17-year-old college student after he tested positive for HIV. The court called the 2002 decision by the insurance company “reprehensible.”
That’s the most an insurance company has ever been ordered to pay in a case involving the practice known as rescission, in which insurance companies retroactively cancel coverage for policyholders based on alleged misstatements – sometimes right after diagnoses of life-threatening diseases.
In the ruling, Justice Jean Hoefer wrote, “We find ample support in the record that Fortis’ conduct was reprehensible. … Fortis demonstrated an indifference to Mitchell’s life and a reckless disregard to his health and safety.”