According to a new report from the U.S. Department of Health and Human Services (HHS), the insurance industry practice of denying coverage to individuals with pre-existing medical conditions means more people are having trouble getting, and affording, health insurance.
In the report, “Coverage Denied: How the Current Health Insurance System Leaves Millions Behind,” HHS details some of the issues facing Americans with pre-existing medical conditions.
It quotes a survey that found that 12.6 million non-elderly adults--36 percent of those Americans who tried to buy insurance on the open market--were discriminated against in the last three years, whether through higher premiums or refusal of coverage. Another survey found that one in 10 people with cancer said they could not get health coverage, and 6 percent said they lost coverage.
According to the report, insurance companies in 45 states can legally discriminate against people based on pre-existing medical conditions.
The report also examined the practice called rescission, in which insurance companies review initial health status questionnaires in the aftermath of a diagnosis of a serious health condition.
In several states, insurance companies can retroactively cancel the entire policy if a condition is missed—even if the condition is unrelated.
According to HHS, a congressional investigation into the practice found that three large payors over a five-year period initiated 20,000 rescissions, denying more than $300 million in medical claims.
Some states have tried to deal with the issue by establishing high-risk pools for the medically uninsurable, but these pools often charge higher rates than those available to healthy individuals in the private insurance market, HHS said. Invariably, only uninsured people with relatively high incomes can afford this insurance.