Largest U.S. Health Insurer Rewarded Employees That Cancelled Coverage of Sick Patients

Largest U.S. Health Insurer Rewarded Employees That Cancelled Coverage of Sick
Patients

Consumer Watchdog Calls on Congress to Ban Bonuses For Canceling, Delaying or
Denying Medical Care

WASHINGTON, June 16 /PRNewswire-USNewswire/ -- Consumer Watchdog called on
Congress to ban any health insurance employee from receiving bonuses for
canceling, delaying, or denying necessary medical care to patients based on
new evidence made public today.

The evidence released by the House subcommittee on Oversight and
Investigations shows that WellPoint, the nation's largest health insurer,
rewarded employees for canceling coverage of sick patients. Employees earned
high points on "performance reviews" for retroactively canceling policies -- a
practice known as "rescission."

Peggy Raddatz testified at the hearing today about her brother, Otto Raddatz,
who died of lymphoma after his health insurer cancelled his coverage. Otto's
insurer based the rescission on Otto's failure to disclose an aneurysm and
gall stones on his application -- conditions that Otto's doctor had never told
him about.

All three insurance executives who testified at the House subcommittee hearing
today refused to commit to only cancel policies of patients who lie about
their health on their insurance application. This shows that insurance
companies will continue to look for inappropriate reasons in the fine print of
insurance policies and applications to refuse necessary medical treatment,
according to Consumer Watchdog.

"The committee's stunning discovery demonstrates both the need for a real
public alternative to for-profit insurers and new legal accountability of
insurance companies that are willing to lie, cheat and kill to boost profits,"
said Jerry Flanagan, Health Care Policy Director for Consumer Watchdog. "When
asked by the committee chairman, WellPoint and other executives refused to
protect innocent patients by only rescinding policies in cases of fraud. That
should send a clear message that insurance companies and HMOs cannot be
trusted with our health. New accountability and a competitive public
alternative to the for-profit insurance market are the only paths to halt
insurers from bankrupting, even killing their patients to increase profit."

According to documents obtained by the subcommittee, one employee of Blue
Cross, a subsidiary of Wellpoint, received a perfect score of "5" in a company
performance review after saving the company nearly $10 million through policy
rescissions. Three insurance companies -- WellPoint, Golden Rule (owned by
United Health) and Assurant -- rescinded more than 20,000 policies over five
years and refused to pay for more than $300 million in medical expenses,
according to documents uncovered by the committee.

Download the WellPoint "performance reviews" here:
http://www.ConsumerWatchdog.org/resources/PerformanceReviews.pdf

Review other committee documents here:
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1671:energy-and-commerce-subcommittee-hearing-on-terminations-of-individual-health-policies-by-insurance-companies-&catid=133:subcommittee-on-oversight-and-investigations&Itemid=7

Last week Consumer Watchdog called for new legal accountability of health
insurers. Download that letter here:
http://www.consumerwatchdog.org/patients/articles/?storyId=27748

Wittney Horton of Los Angeles, whose own insurance was cancelled after she
sought routine medical care, testified at today's hearing, urging lawmakers to
stop insurance companies from canceling or downgrading insurance coverage when
patients get sick.

In her testimony to the committee today, Wittney Horton said:

"Americans desperately need health care reform. As my experience shows,
owning an insurance policy does not necessarily equal access to health care.
If insurance companies are not prevented from canceling or restricting
coverage after patients get sick, insurance policies are not worth the paper
they are printed on. Insurance companies are making record profits by
collecting premiums in exchange for the promises they make to be there when
people need them. Make them keep that promise."

Download Ms. Horton's complete testimony here:
http://www.ConsumerWatchdog.org/resources/HortonTestimony.pdf

When Horton applied for coverage with Blue Cross, she filled out the long and
confusing application to the best of her ability. She gave Blue Cross
permission to review her medical records. Blue Cross accepted her application
and sold her coverage. After Horton sought routine medical care, Blue Cross
scoured Horton's medical record and retroactively cancelled her coverage.
Blue Cross said it would have never sold her a policy if the company had known
Horton had "polycystic ovaries," a condition not disclosed on her application.
The rescission letter was the first time Horton had ever heard about this
condition. Horton's doctor had suspected she had the condition, noted it in
Horton's medical file, but never told Horton about it.

In a letter to chairman Henry Waxman (D-CA) last year when the subcommittee
began its rescission investigation, Consumer Watchdog urged lawmakers to bar
such rescissions unless an insurance company could prove that the patient
"intentionally misrepresented" her health condition as required under federal
law. Under such an approach, Blue Cross could not cancel Horton's policy
since she was not aware of the condition and therefore could not have lied
about it on her application. Download Consumer Watchdog's letter to Waxman
here: http://www.ConsumerWatchdog.org/resources/WaxmanRescissionLetter.pdf

Consumer Watchdog is a non-partisan consumer advocacy organization with
offices in Washington D.C. and Santa Monica, California. Visit us on the web
at: www.ConsumerWatchdog.org

SOURCE Consumer Watchdog

Jerry Flanagan, +1-310-889-4912, or Carmen Balber, +1-202-629-3043, both of
Consumer Watchdog