Congress Reveals the Largest Insurance Companies are Using Pre-Existing Conditions to Deny Coverage

The U.S. House of Representatives, Committee on Energy and Commerce conducted an investigation into the extent of coverage denials and exclusions for pre-existing conditions in the individual health insurance market.

In the following memorandum, Congress reveals that the (1) the four largest for-profit health insurance companies, Aetna, Humana, UnitedHealth Group, and WellPoint, denied over 600,000 individuals coverage because of pre-existing conditions in the three years before passage of health reform and (2) the number of coverage denials increased significantly each year.

Shockingly, the Committee on Energy and Commerce uncovered that Aetna, Humana, UnitedHealth Group, and WellPoint refused to pay 212,800 claims for medical treatment due to pre-existing conditions between 2007 – 2009. In some cases, the companies offered health insurance to individuals with pre-existing conditions, but used medical riders to exclude coverage or increase deductibles for the pre-existing conditions.

American consumers were aghast to learn that Aetna, Humana, UnitedHealth Group, and WellPoint all had corporate business plans for increasing revenue by relying pre-existing conditions to limit the amount of money paid for medical claims. In one document, executives devised a plan for “strategic growth” in the individual market that identified areas of opportunity to be “improved pre-existing exclusion processes, tighter condition and large claim review, [and] tighter underwriting guidelines.”

Congress also exposed other internal corporate documents showing that insurance company executives were considering practices such as lengthening the look-back period, assessing separate deductibles specifically for identified pre-existing conditions, denying payments for prescription drugs related to pre-existing conditions, linking additional claims to pre-existing conditions exclusions, and narrowing the definition of prior creditable insurance coverage.

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Baby Denied Healthcare While in the Womb. Aetna Says Newborn has Pre-Existing Condition.

Health insurance company Aetna, held up paying thousands of dollars in medical charges to newborn Kinsleigh Barnes, according to a report by ABC News. The reason? The insurance company said the newborn might have been suffering from a pre-existing condition.

New mother Kelly Barnes is heartbroken and angry. Barnes said she called Aetna hoping for a resolution.  “It’s like you’re talking to somebody who is reading from a script,” Barnes said. “They don’t have answers for you based on what you’re telling them.”

According to Barnes’ attorney, “Under Aetna’s own definition, in order to deny for pre-existing condition, there has to be medical advice or care that was rendered or given. And in this case, of course, that would be real hard, given the fact the baby was still in the womb.”

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U.S. to Let Insurers Raise Fees for Sick Children

The Obama administration, aiming to encourage health insurance companies to offer child-only policies, said that health insurance companies could charge higher premiums for coverage of children with serious medical problems, if state law allowed it.

Earlier this year, major insurers, faced with an unprofitable business, stopped issuing new child-only policies. They said that the Obama administration’s interpretation of the new health care law would allow families to buy such coverage at the last minute, when children became ill and were headed to the hospital.

The difficulty in preserving access to child-only insurance policies is the latest example of unintended consequences of the new law, the Patient Protection and Affordable Care Act. The problem may be solved in 2014. If Democrats can beat back Republican efforts to dismantle the law, most Americans will be required to carry health insurance, starting in 2014, and insurers will be required to accept all applicants, regardless of pre-existing conditions.

The new policy statement, issued Wednesday by Kathleen Sebelius, the secretary of health and human services, came with a fresh blast of criticism of the insurance industry.

“Unfortunately,” Ms. Sebelius said, “some insurers have decided to stop writing new business in the child-only insurance market, reneging on a previous commitment made in a March letter to ‘make pre-existing condition exclusions a thing of the past.”

The White House has been tussling with insurers for months, trying to get them to provide coverage for children with cancer, autism, heart defects and other conditions. In a letter Wednesday to the National Association of Insurance Commissioners, Ms. Sebelius said the decision of some insurers to stop issuing child-only policies was “extremely disappointing.”

On March 29, 2010 six days after President Obama signed the health care bill, Ms. Sebelius sent a sternly worded letter to insurers, saying, “Children with pre-existing conditions may not be denied access to their parents’ health insurance plan.”

Karen M. Ignagni, president of America’s Health Insurance Plans (AHIP), a trade group, sent an immediate response, accepting the administration’s demand. Robert E. Zirkelbach, a spokesman for the AHIP trade group, said Wednesday, “Health plans have upheld the commitment” by Ms. Ignagni. “Children with pre-existing conditions are able to obtain coverage on their parents’ policies,” he said. (more…)

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500,000 Americans Denied Health Insurance Coverage Based on Pre-Existing Conditions

The four largest health insurance companies in the United States denied insurance coverage to more than half a million individuals because of their pre-existing conditions from 2007 to 2009, according to an investigation by the House of Representatives Committee on Energy and Commerce. On average, the four companies – Aetna, Humana, UnitedHealth Group and WellPoint – denied 1 out of 7 applicants’ coverage based on conditions such as pregnancy, angina, diabetes and heart disease.

A memo circulated by one unidentified company in 2006 listed 14 medical categories that did not require review, including: any woman who was pregnant or had been treated for infertility within five years.

The congressional investigation found that the number of people who were denied coverage increased about 49 per cent from 2007 to 2009. In a two year period, the insurance corporations refused to pay 212,800 claims for individuals who were already insured based on their previous medical conditions.

The congressional probe also found that each company saw its policy on pre-existing conditions as a key area of revenue growth. For example, internal documents by a company that was not identified by the committee showed that executives were considering practices such as denying payments for drugs related to pre-existing conditions and linking additional claims to pre-existing condition exclusions as ways to limit the amount of money the company had to pay for claims.

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