First, sorry about the length of this post but this is "THEE" ISSUE that will make the PUBLIC OPTION in any Health Care Reform Bill a moral imperative. And a BIG re-election issue for ANY lawmaker that refuses to support the Public Option.

Most are aware of my feelings when it comes to the SOUL EATING BASTARDS called Health Insurance Companies, but the absolute undiluted bullshit called "Post Claim Underwriting" takes the outrage to a whole new level, but it also provides the fulcrum for The Public Option.

Imagine that you actually have enough money to go out and purchase health insurance for you and your family. You find a company you like, you fill out the application, the company issues you a policy and you pay your monthly premiums on time for 2 or 3 years, all the while thinking you actually have health insurance.

Then one day you go to the doc and get the news you have cancer, but they caught it early and with the right treatment everything should be fine, so you start making arrangements for the FIGHT OF YOUR LIFE and schedule the necessary treatment.

All seems to be fine until a day or two before your treatment is to start and you get a letter from your "friendly" health insurance company saying, that because you were treated for heartburn 12 years ago they are retroactively canceling your policy and you now have no coverage for treatment of the cancer.

Want more on "Post Claim Underwriting"? Here are a couple of explanations of the scam (thanks to both authors I could not find a name to go with the first example, but, please feel free to take a look at both links):

Post claim underwriting occurs when an insurance company refuses to pay your claim for a loss that should have been covered, on the grounds that you were a bad risk and the policy should never have been issued, then cancels or rescinds the policy even retroactively.

When you apply for insurance, your application is underwritten by the insurance company. Underwriting is the practice of determining, based on your application and other information the underwriter may obtain regarding your health and background, whether the insurance company should make you an offer of insurance and, if so, on what terms and for what premium. All of this underwriting work is normally completed before your insurance policy is issued. Post claim underwriting is a practice whereby an insurance company, which has reason to know or suspect adverse prior medical history for you, waits until you file a claim before spending money to confirm its suspicion and then asserts that no coverage exists; therefore no claim can be paid.

An insurance company that is relying on post claim underwriting, instead of looking to pay your submitted claim for a loss incurred by you as promised under the terms of the insurance policy it issued to you, looks for all the things in your application or coming from your application that it might be able to dig up to rescind (cancel) your policy and avoid having to pay your claim. The insurance company, rather than refusing to issue you a policy at the time you apply because information in the application leads it to believe you are a bad risk, waits until after the policy has been issued (and you are falsely secure in the knowledge that you have insurance protection) and, then after you have submitted a claim, denies coverage on the grounds that the policy should not have been issued in the first place.

When this occurs, the insurance company ignores its commonly understood obligation to do underwriting when a policy application is made rather conducting its risk assessment after your claim is submitted. The insurance company performs this after-the-fact evaluation to rid itself of an insured individual it contends should never have received insurance coverage. Meanwhile, you think that you have valid insurance and do not seek insurance elsewhere.

Often a long delay occurs between the time you file your claim and its final disposition while the insurance company performs underwriting. The company prepares this file as thoroughly and completely as it can to support its plan to rescind, or cancel, your policy on the grounds that it has, after the fact, unearthed information about your prior medical history that would have caused it to decline your application for insurance if this information were known at the time of application. The acquisition of medical records and their assessment can take months. More info =====> HERE

 

Wouldn't it be great if you could get paid for making a promise to do something in the future, but when the time came to keep your side of the bargain you could cancel the contract and not have to pay? The person you made the promises to might be upset at paying you for all those years for nothing, but you get free money! Ignoring the moral and ethical flaws with the scheme, it would be a great way to improve your financial position. Of course, that's how insurance companies often operate these days. One tool they use is "post-claim underwriting." It is a terrible, dishonest practice that reneges on the insurer's promises when the insured most needs the benefits promised in the insurance policy.

What is post-claim underwriting? In its simplest form, an insurance company takes a cursory look at your application, sells you a policy, collects premiums until you make a claim, and then does an "investigation" to determine that they should not have sold you the policy in the first place. Instead of doing a true underwriting analysis before issuing the policy, the insurer waits until after you make a claim and then decides you tricked them into insuring you. The insurance company then rescinds the policy, claiming you misrepresented something or failed to disclose something on your application for the insurance.

From the insurer's perspective, it's the perfect scam. The insurer gets to collect premiums on a policy, but does not have to pay the benefits promised. Of course, it is also a bad faith practice, a flagrant breach of the covenant of good faith and fair dealing that is part of every insurance policy, and may be a crime. Unfortunately, those problems will not deter an insurer who cares more about its bottom line than for the rights and interests of its insureds.

Some states have a statute that expressly prohibits post-claim underwriting. California has such a statute, but that did not stop health insurers from doing post-claim underwriting. The language of the statute is very explicit--it requires an insurer to complete its underwriting investigation before issuing the policy, not wait until after a claim is made. Might seem like a common sense requirement to you as an insurance consumer, but not to an insurance company who wants to cancel a policy. This is illustrated by the recent case of Hailey v. California Physician's Service, 158 Cal.App.4th 452 (Ct. App. 4th Div 2007). Blue Shield contended that the statute requiring it "to complete medical underwriting" before issuing the policy really meant it could just look at the application, assign values to the risks disclosed, and issue a policy. Although it had a medical release from the prospective insured, it did no underwriting investigation to determine if it should insure the person. Blue Shield argued it could then do a "postclaim investigation" after a claim was made, and rescind the policy. The California court rejected that assertion, viewing the "postclaim investigation" as basically the same thing as "postclaim underwriting." The court ruled that the insurer must do a reasonable underwriting investigation before issuing the policy or it will lose its ability to rescind the policy later, unless the insured willfully misrepresented something in the application. A wonderful rule to protect insurance consumers.

"Thanks to W. Michael Moody for this information, more info ===>  HERE"

More info =====> HERE    and ====> HERE

If you have the time take a look at these horror stories ==> HERE

I BELIEVE THAT THIS SINGLE issue.. or more accurately... this single SCAM is enough to get a PUBLIC OPTION included in any health care reform bill, if WE shout about enough. I defy ANY elected official to defend ANY insurance company that uses tactics like these.

I also need to mention that it is not just "no name" Insurers doing this to people, it is companies like Assurant, Wellpoint, United Health Care and others.

The kicker to all this is that, this assault is usually against an individual or a small business group or those people or businesses that don't have the time, energy or the money to fight back.

Something I co-opted and expanded just a little bit:

"Do not meddle in the affairs of wizards, for they are subtle and quick to anger.  Do not meddle in the affairs of dragons for you are crunchy and taste good with ketchup.  Do not meddle in the affairs of cats, for they are subtle, and will piss on your computer.  But Health Insurance Companies?... well.... FUCK the Health Insurance Companies... lets get 'em "

I URGE you to post any first hand experience you know of, or have been through with this health insurance company, bullshit called Post Claim Underwriting.

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