I must confess I have a chauvinistic bias that in general women are better human beings than men. However, I may have to reevaluate that position if there’s any truth to the recent Reuters report that WellPoint – a company headed by a woman — is using a software algorithm to target women with breast cancer so that the company can find pretexts for canceling their health insurance. WellPoint denies that it singles out women with breast cancer for rescission (the retroactive canceling of a member’s insurance policy) — noting that its software “is used to look at a series of diagnostic codes meant to capture conditions that applicants would likely have known about at the time they applied for coverage.” In other words, the software is supposed to help identify people who committed fraud by lying on their insurance application. The company says less than one-tenth of 1% of its individual insurance policies are rescinded.
The Reuters report puts WellPoint back in the crosshairs of the Obama Administration, with HHS Secretary Sebelius calling the rescissions ”unconscionable” and “deplorable” in a letter to WellPoint chief executive Angela Braly. More broadly, actions like the one WellPoint is being accused of are a primary reason why we have healthcare reform — i.e., the industry’s fundamental failure to consistently provide members with the healthcare coverage they need — and have paid for — when they are sick. (And I’m not talking about legitimate cases where health plans deny questionable or experimental treatments with limited or unproven benefits). Unless the industry seriously addresses this issue, the regulatory hammer — along with public opinion — is only going to come down harder.
Addition, April 28, 2010: WellPoint announces it will implement federal rescission reforms effective May 1, ahead of healthcare law deadlines. As the company notes, “The standard contained in the federal legislation requires insurers not to rescind policies except in cases of fraud or intentional misrepresentation of material fact.”
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