AHIP Tries To Stonewall Barton’s Rescissions Amendment

On Wednesday, the House Energy and Commerce Committee approved Rep. Joe Barton’s (R-TX) amendment to prevent insurance companies from rescinding coverage for sick Americans. In an attempt to regulate the individual insurance market — which is currently regulated by the states — the amendment protects “insured people seeking treatment for a serious illness from losing coverage because they accidentally fail to reveal a prior unrelated condition.”

Indeed, Barton’s amendment is an important step towards enacting consumer protections that shield individuals from industry abuses.

Just last month, Anthem Blue Cross and Blue Shield agreed “to pay a total of $13 million in fines and to offer new health coverage to more than 2,200 Californians the companies dropped after they became ill.” More recently, Health Net Inc. reached a settlement with the California Department of Insurance, agreeing “to offer new coverage to 926 customers who were dropped from individual or family policies in the years since 2004.”

Across the country, 29 states and the District of Columbia have no state requirements “that insurers complete all medical underwriting and resolve all questions at the time of application” and 13 states do not require “insurers to notify policyholders in advance about what conditions will not be covered.”

Despite much needed consumer protections, however, the American Health Insurance Plans — an insurance industry front group — is trying to maintain the status quo. On Tuesday, President Karen Ignagni wrote to Barton “asking him to delay action on the amendment, adding that AHIP had developed its own proposal that allows insurance companies to rescind coverage only if patients withheld information ‘that should have been included in a complete and accurate response.’”

But delaying action is no solution at all. Ignagni’s suggestion that families strained by denied claims wait longer for relief, in this economy, ignores the growing pains of the middle class and does nothing to reform a system that regularly places Americans into economic turmoil.