In an article in today’s Huffington Post. we learn that the South Carolina Supreme Court has ordered an insurance company to pay $10 million for wrongly revoking the insurance policy of Jerome Mitchell, a 17-year-old college student after he tested positive for HIV. The court called the 2002 decision by the insurance company “reprehensible,” demonstrating an indifference to Mitchell’s life and a reckless disregard to his health and safety
The judgment appears to be the most an insurance company has ever been ordered to pay in a case involving the practice known as rescission, in which insurance companies retroactively cancel coverage for policyholders based on alleged misstatements - sometimes right after diagnoses of life-threatening diseases.
The timing for this is perfect as the U.S. Congress debates the details of universal health reform. As the article states:
An investigation this summer by the House Energy and Commerce Committee, and earlier ones by state regulators in California, New York and Connecticut, found that thousands of vulnerable and seriously ill policyholders have had their coverage canceled by many of the nation’s largest insurance companies without any legal basis. The congressional committee found that three insurance companies alone made at least $300 million over five years from rescission. One of those three companies was Assurant.
Think because you have heath insurance you aren’t in danger of being denied coverage? Think again. As a matter of business policy, insurance companies deny one out of every five procedures. Contact your member of Congress; demand that any healthcare reform outlaw the shameful practice by insurance companies of denying coverage after anyone is insured. A deal is a deal!
