POLITICS
06/28/2010 05:12 am ET Updated May 25, 2011

UnitedHealthcare Will Voluntarily End Rescissions, Second Insurer In Last Two Days

Within a day of House leaders calling on insurance companies to preemptively end the practice of rescinding plans when a patient gets sick, two major insurers have complied.

UnitedHealthcare, "has ended its limited use of rescissions effective immediately, except in cases of fraud or intentional misrepresentation of material fact," the company announced on Wednesday in a clear admission that it was engaged in the practice as a matter of policy.

On Tuesday evening, as reported in HuffPost Hill, WellPoint agreed to end the practice. The law regarding rescissions officially takes effect on Sept. 23.

UnitedHealthcare also intends to comply with an additional request, the company said, and "will be instituting independent, external third party review in the near term" that would allowed patients whose coverage is terminated to appeal the decision.

"In the spirit of the recently passed health reform legislation, UnitedHealthcare moved quickly to eliminate the practice of rescissions, except in cases of fraud or intentional misrepresentation of material fact," said Gail Boudreaux, president of UnitedHealthcare.

What exactly constitutes fraud or misrepresentation will continue to be subject to dispute. Does forgetting to note childhood acne give insurers license to rescind a policy?

The chairmen of the House committees and subcommittees that oversaw the passage of health care pressed the insurers because they had already agreed to begin insuring the children of policyholders until they turned 26, before the law had gone into effect.