Los Angeles Times, 2007: One of the state’s largest health insurers set goals and paid bonuses based in part on how many individual policyholders were dropped and how much money was saved.The practice was known as “rescission.” Companies hired people to go through the insurance forms of people undergoing expensive medical treatment, looking for typos or minor inaccuracies. If you forgot to mention a tooth filling — boom! — no chemotherapy for you. You’d have no insurance coverage at all and a pre-existing condition. You were screwed. This was the unregulated, free-market approach that Republicans tell you is so wonderful and perfect.
Woodland Hills-based Health Net Inc. avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies between 2000 and 2006. During that period, it paid its senior analyst in charge of cancellations more than $20,000 in bonuses based in part on her meeting or exceeding annual targets for revoking policies, documents disclosed Thursday showed.
The revelation that the health plan had cancellation goals and bonuses comes amid a storm of controversy over the industry-wide but long-hidden practice of rescinding coverage after expensive medical treatments have been authorized.
Obamacare made the practice illegal and in May of 2010, this particular corporate scam ended industry-wide.
"[Insurance companies] look for anything that they could say ‘you didn’t tell us about,’" Dale Rice, whose 17 year-old daughter’s coverage was pulled in the middle of a health crisis, told the Chicago Tribune. “They hope that people just lay down and die and don’t fight.”
The insurance industry was denying coverage and literally allowing people to die after taking their money for years. That’s a cancellation scandal and going back to that is not an option.