Intent is not required for Insurance Rescission in most jurisdictions. Various Health Insurance Companies individually announced at the end of April that, in effect, although they never targeted such a practice on sick Insureds who make Claims on their Health Coverage, they would stop doing it -- although they were vague about exactly when they would stop basing Rescission actions on anything other than intentional fraud. See, e.g., Lisa Girion, "WellPoint and Blue Shield of Calif. to Stop Dropping Sick Policyholders" (Los Angeles Times Online, Wed., April 28, 2010).
Next came reports that the head of America's Health Insurance Plans, or "AHIP," had sent a letter to otherwise unidentified "top House Democrats" renouncing the previous Rescission practice. These reports were also vague about when Health Insurance Companies would limit their use of Rescission to cases of actual intentional fraud without targeting sick people who make Health Insurance Claims, other than that they would stop on an unknown date "in May". These reports are too many and too vague to usefully link here, and they contain no further information in any case.
In reality, these announcements are not really what they seem. In the recently enacted Federal Health Care Reform Act, Rescission is still permitted. However, it will be limited in the case of Health Insurance Policies and Programs to actual, intentional fraud. Merely erroneous representations will not be enough to rescind Health Insurance Coverage under the new Federal Law, even if the inadvertently wrong representations were "material". That reform is scheduled to take effect in September, 2010. The Health Insurance Companies are making headlines, then, by announcing that sometime soon they will follow the Federal Law 3 or 4 months earlier than they will be required to follow it.
And that's a fact.
Dennis J. Wall will be speaking about "Insurance Rescission" at the Orange County (Florida) Bar Association in Orlando on May 26, 2010.
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