Insurance: Here today, cancelled tomorrow

The insurance industry makes billions of dollars. Why would they want to cancel your policy? To make even more money. Here’s the scam:
An unfortunate loved one gets the bad news: they have been diagnosed with cancer, or any number of horrible illnesses. But, we have health insurance so at least we don’t have to worry about that. Right? Not always. The newest battlefield in the health insurance arena is cancellation or “rescission” of the health insurance policy.
It goes like this. The insurance company gets the word that they will be on the hook for thousands or even hundreds of thousand of dollars for expensive health care when someone comes down with a serious sickness. Not wanting to pay, they scour through the person’s original application, which could be years old, and find some small omission or condition the person forgot to list.
They then turn around and say, “You lied to us on the application many years ago so we no longer have to cover you and we won’t be paying for any of your medical bills, even though we cashed your premiums all of these years.” Fair? Hardly, but unfortunately, it’s happening all too frequently.
Outrageous examples of these “rescissions” abound. Individuals who have been diagnosed with cancer have been told “no coverage” when they need it the most. Mothers have been notified that they and their newborns have been terminated even after the insurer approved prenatal services. Why? Perhaps they forgot to list an anti-anxiety medication they got in college decades ago, or the mother didn’t list that she was pregnant at the time the application was signed, even though she didn’t know she was pregnant because she had only been pregnant for two weeks!
These cases are real. Regulatory agencies and attorneys are fighting to stop this conduct but it’s happening in hundreds of cases across California. Despite many multi-million dollar settlements, insurance companies continue to practice these unfair and outrageous business practices. It still makes economic sense for them, apparently.
What can a consumer do if faced with this situation? Seek legal help immediately. Call your lawmakers and complain. Write letters to newspapers. Make a lot of noise so the practice is brought to light. How do you think folks feel about an insurance company canceling someone who just found out they have cancer because they forgot to list one medication they took  20 years ago? Further, this forgotten medication  has nothing whatsoever to do with cancer. Finally, add the fact that the insurance company has been cashing this person’s premiums for years.
It doesn’t sit very well with people in the community. It doesn’t sit well at all with me.

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