The practice of taking away someone's health insurance because of sometimes dubious "pre-existing conditions" or an alleged omission on an application form is all too common in the industry, especially among providers of individual medical policies, as detailed in last month's feature "You're in Bad Hands." That story explored the four-year battle behind Jennifer Latham's stunning $37 million verdict against Assurant Health, which had canceled the Lafayette woman's coverage after a horrendous car accident because of ambiguous prior medical records that had nothing to do with her injuries.
As demonstrated by the stories lawmakers shared last week, Latham's experience is hardly unique.
Senate Majority Leader Harry Reid got the ball rolling by telling the story of a Reno restaurant owner, Jesus Gutierrez, whose newborn daughter's huge surgery bills for a cleft palate were denied by his insurance company because it was a pre-existing condition. No word yet if Gutierrez's insuror is Assurant Health, but Reid presented him as the next Joe the Plumber, a rallying point for reform: "This shouldn't happen to anyone in America. He had health insurance. He paid his premiums."
By the end of the day (find a partial transcript here), leaders on both sides of the aisle had blasted insurance companies for "jerking around" people who pay premiums and then get claims denied on various pretexts. In fact, while the insurance industry claims that rescission is a "rare" remedy affecting only a small percentage of their customers, the chances of getting rescinded on an individual policy if you happen to get sick are much, much higher -- see this scary bit of number-crunching from Taunter Media.
Which makes you wonder: If we're so hopelessly deadlocked on comprehensive health care reform, what's to stop these ideologues from at least passing a modest bill that would limit rescission to cases of provable fraud? That could save the industry a few more massive punitive verdicts and stop screwing with people who actually took the trouble and expense to get health coverage but then had the misfortune to get sick.