Health Insurance Articles
How Rescission Can Affect Your Health Insurance Policy Claim
2010-10-04
Sometimes, an insurance provider will deny a health insurance claim and cancel a person's policy. This process is known as rescission, and it can be incredibly frustrating if you ever have to file a health insurance claim. Understanding rescission can be important when applying for medical coverage.
Rescission is a controversial practice that health insurance companies use to deny coverage once medical insurance claims have been submitted. Regardless of preapproval, a health insurance company could rescind medical coverage if it can prove that a policy holder lied or withheld information on a health insurance application. The argument that health insurance companies make when defending rescission is that because a policy holder was untruthful about his or her health, the company cannot be expected to pay claims that may have resulted from the withheld or untrue information. Opponents of rescission claim that health insurance companies are simply trying to improve their profits by preventing a certain customer from successfully filing a health insurance claim. There are some cases in which health insurance policies have been rescinded over relatively minor mistakes on an application form, such as the weight or height of the applicant.
The new health insurance law now bans the practice of rescission for preapproved coverage, which means that health insurance approval processes will likely be more difficult in the future. If you have submitted a health insurance claim and had your coverage rescinded, however, the law's provisions will not save you from a policy cancellation that occurred before the new law took effect. However, you may have several options to avoid hefty medical bills. You can submit a complaint to your insurance company and to your state's insurance commission. If you can prove that your health insurance was rescinded due to your claim and without cause, your medical insurance company may be legally compelled to pay for your coverage. For instance, if the company claimed that you lied on your application, but you have a copy of your application that proves otherwise, you can often avoid rescission of your health insurance benefits.
When you file a health insurance claim or fill out an application, it is important to be as truthful as possible. Include all information about medications and health conditions, and if you realize that you have forgotten to mention a specific health condition when applying for your policy, contact your insurance company as quickly as you can to clear up the matter. You may need to pay more for your health insurance, but you will avoid the complications that can come from an inaccurate application. While rescission is no longer an option for health insurance companies, an accurate health insurance policy is still important.
