Insurance and Health Care Reform and WellPoint and Health Care & Life Sciences and Health Care & Insurance

WellPoint to adhere to new rescission rules early

April 27, 2010

WellPoint Inc., after being painted by the Obama administration as the bad boy of a bad industry, now is trying to win gold stars for good behavior.

The Indianapolis-based health insurer announced Tuesday afternoon it will be the first company to adopt stricter standards on canceling policies, as called for in the health reform bill passed in March.

The new law says health insurers can cancel a customer’s policy only in cases of fraud or intentional lying. Currently, health insurers sometimes cancel policies if a customer omits or misconstrues information, even unwittingly.

WellPoint will adopt the stricter standard on May 1—nearly five months ahead of schedule.

The move comes after Obama’s health secretary, Kathleen Sebelius, chastised WellPoint for doing targeted investigations and cancellations on breast cancer patients following such allegations in a Reuters story last week. WellPoint said the story was riddled with errors and was “grossly misleading.”

“There have been a lot of misrepresentations and inaccuracies in recent days that have caused confusion among our members and among the public generally about our policies in this area" WellPoint CEO Angela Braly said in Tuesday’s statement. "We think today’s announcement will go a long way toward bringing greater clarity.”

Last week, WellPoint and its rival UnitedHealthcare said they would immediately start covering children of policyholders until age 26. That provision was scheduled by the new law to take effect at the end of September.

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