Published: July 28, 2009 03:10 pm      

Indiana Rep. Baron Hill, Yarmuth return home for health care testimony

Congressional field hearing held at IUS

New Albany played host to a bit of Washington and its current hot issue — health care reform — Monday.

U.S. Rep. Baron Hill joined colleagues Rep. John Yarmuth, a Democrat from Louisville, and Michigan Democrat Rep. Bart Stupak at Indiana University Southeast on Tuesday for testimony on the practice of rescinding coverage by health insurance companies.

The practice allows insurance companies to take back a policy if fraud is discovered, but critics say the practice has become a way for companies to protect profits if a client gets a serious disease.

“If they can find any reason, whether it’s intentional or unintentional, whether you knew or didn’t know .... any reason to be denied once the high cost of health care because of your illness or disease, they rescind you, and we have to prevent that,” said Stupak, the chair of the House Oversight and Investigations Subcommittee.

After questioning WellPoint CEO Brian Sassi and Golden Rule CEO Richard Collins, Hill said it was obvious the issue needed to be addressed as lawmakers consider overhauling the health care system.

“I think it is fairly obvious that the insurance companies are using the claims that have been submitted as a reason to figure out a way how not to cover that person,” said Hill, who flew back to the Capitol on Monday to continue discussions on a national health care plan.

Golden Rule, based in Indianapolis, is a subsidy of the UnitedHealth Group.

Both executives testified that use of rescission is both necessary and rare.

“Under our current system, failure to act on these cases would be fundamentally unfair to individuals and working families who play by the rules,” Collins testified.

Though Sassi told lawmakers WellPoint won’t rescind personal policies after two years, it took away coverage from a Louisville woman after she was diagnosed with breast cancer and later MRSA, a direct result of her cancer treatment. Patricia Reilling, 63, said she bought a policy through the Kentucky Retail Federation in 1990 from Anthem, which merged with WellPoint in 2004. Though she had a bad back that required regular treatment, she said she was in good health until March of 2008 when she discovered a cancerous lump on one of her breasts.

“I received a letter from Anthem denying the MRI [for further treatment] with the explanation that nothing in my health background or family history indicated I was likely to have cancer,” she said.

Sassi said because Reilling got her policy through the retail federation, she was covered by different rules, but promised to look further into her case.

Stupak tried to get Collins and Sassi to pledge only to use rescission in “clear and convincing” fraud cases, and while both said they support reform, they refused to commit Stupak’s challenge of not rescinding cases if the omission is not intentional.

Indiana Department of Insurance Commissioner Carol Cutter told lawmakers she believed insurers need time to review clients to prevent fraud. Under state law, no policies can be rescinded after two years.

“We haven’t had any that we have investigated that we weren’t able to come to a conclusion that we weren’t happy with or thought was unclear,” she said.

State laws governing rescission vary. Though Indiana seems passive on the issue, Stupak said its law is stricter than some, but the disparity shows the need for a federal statute.

Guest Eleanor Kinney told the committee she believed while companies need to be able to review a new client, it can be done more quickly.

“What seems to the offensive to many is the ability to go back to review a chart and review statements looking for some kind of a factor that would give rise to a conclusion that there was a knowing misrepresentation,” said Kinney, the co-director of the William S. and Christine S. Hall Center for Law and Health. “I think that is the practice you really need to go after.”

Hill said he and the Blue Dog Collation, a group of fiscally conservative House Democrats, have worked every day with the House committee in charge of crafting a health care proposal before sending it to the full chamber. Cost still remains a top concern for Hill, but he said he expects a national plan to be approved by the end of the year. The current House proposal carries a price tag of about $1 trillion, while the Senate’s early plan is estimated to cost about $800 million.

“It’s too early for me to support what’s out there right now, but we are working very hard every single day,” Hill said.