ONTARIO, Calif., July 13 Rescission, sometimes known as "post-claims underwriting," is the loophole health insurers use to avoid paying out benefits on cancer claims and various other serious illness. They look for and find errors in the policyholder's paperwork that can help them justify canceling a policy, says Frank N. Darras, the nation's top insurance lawyer.
Some insurance companies actually reward their employees if they achieve a high level of claims denials and save the company money. Social responsibility does not stand a chance when a company stands to save millions of dollars annually, says Darras.
Rescission victims are usually people who are less educated or elderly and are more likely to make an error in the first place and then less likely to go to court if they are denied. The problem is that legally, insurance companies are allowed to do this usually within a timeframe of up to two years. See www.darraslaw.com.
"People just need to be very careful when filling out their forms," warns Darras. "If you need help filling out the forms correctly, get that help. Also, make sure you disclose EVERYTHING." This cannot be stressed enough. For example, your insurance claim for breast cancer could be denied if you fail to disclose being treated for acne. It seems ridiculous, but it happens.
Healthcare reform is on its way. The House Subcommittee on Oversight and Investigations showed in 2009 that more than $300 million was saved by only three insurance companies simply by rescinding 20,000+ policies that had some error made by the policyholders over a five-year period.
It was also revealed that policyholders with breast cancer, lymphoma and over 1,000 other conditions were targeted by insurance companies for rescission and that employees received high marks in performance reviews for finding these errors and cancelling customers suffering expensive illnesses.
"It's the ugly truth, and until actual reform happens, insurance companies will continue to ignore their social responsibility and prey on the sick and elderly," claims Darras. "Our best advice is to be very careful and seek help if you need it."
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Frank N. Darras
SOURCE Frank N. Darras