Health Insurance Rescissions


What Is A Rescission?

A rescission is a discontinuation of your health care benefits, as a result of alleged fraud.  Health insurance companies have the right to rescind a medical care plan as a result of concealment, material breach of warranty, or material misrepresentation, however they have abused this right. When an insurance company rescinds, they will send the policy-holder notification with a check to cover their premium cost, acting as a refund.

There are two ways rescission can occur:

  • Intentional misrepresentation or fraud
  • Unintentional misrepresentation

So either you forgot a piece of  information, or you lied about a condition on your insurance application.

 

When Do They Happen?

Rescissions have been initiated by several insurers, attempting to drop policy-holders due to being diagnosed with conditions that were costly to maintain, such as HIV and breast cancer. They tried to pass it off as a breach of contract or misrepresentation, when it was unethical for them to do, and thus was limited by the Patient Protection and Affordable Care Act.

 

How To Avoid A Rescission

Though the Patient Protection and Affordable Care Act has placed limitations on health insurance companies’ ability to rescind, they are still capable of revoking your benefits.

  • Honesty: If you know that you have answered the questions on your insurance application thoroughly and honestly, leaving no details up for question, your health insurance is not likely to be terminated.
  • Group Health Insurance helps avoid rescission entirely, as it is only relevant to individual health care.
  • Try not to change insurance companies if you have a pre-existing condition. Consult with a health insurance agent before changing companies to weigh your needs.
  • Ask an expert: Call one of the health insurance agents at East Coast Health Insurance for any questions related to rescissions, and how to be insured and worry-free about your benefits.