Health Insurance Companies Resort to New Ways of Denying Medical Benefits to Policyholders

Health insurance companies are finding new ways to avoid paying claims of policyholders most in need of medical treatment.

One of the latest insurance company tactics is rescinding policies after individuals file claims, and encouraging them to pursue benefits from Medicare, Medicaid, or other sources. Another serious problem is “dual-role insurers,” which are companies that not only pay benefits, but also decide who is entitled to receive them. While the federal Employee Retirement Income Security Act allows insurance companies to do this, many argue this dual role presents an inherent conflict of interest.

Some insurers are directing staff to scrutinize each claim, to find any hint of “misrepresentation” that would be an excuse to cancel a policy. For example, a company might try to revoke a policy, if an individual did not identify a previous health problem or medical procedure on his or her initial insurance application.

Increasing public attention has prompted state industry regulators to investigate and fine some health insurers for these unfair and unlawful practices. One recent investigation revealed that an insurer paid employee bonuses, based on the number of policies they cancelled.

In short, these companies increase profits by wrongfully denying claims of their sickest policyholders, and continuing coverage only to those who are healthy.

If you or a loved one has encountered similar problems with your insurance company, you need to protect your legal rights. Contact an experienced attorney who can help you receive the medical benefits and coverage that you deserve.