DeLauro Applauds Wellpoint Decision to End Rescission Practices

Washington, DC- Congresswoman Rosa L. DeLauro (CT-3) issued the following statement in response to Wellpoint, Inc. announcement that the company will implement provisions included in the Patient Protection and Affordable Care Act, which calls for an end to rescissions, on May 1.

According to published reports last week, Wellpoint used a computer program to identify women currently insured through their company and were recently diagnosed with breast cancer. The system would trigger an investigation into whether or not the claim was fraudulent, and ultimately would often lead to the cancellation, or rescission, of the policy.

Wellpoint has denied that they target women who have breast cancer for rescission. However, an investigation into insurance company rescissions by the House Energy and Commerce Committee Subcommittee on Oversight and Investigations found that Wellpoint had saved $128.9 million as a result of rescissions between 2003 and 2007.

Congresswoman DeLauro and 58 Congressional colleagues sent a letter to Angela Braly, the President and CEO of Wellpoint, Inc., earlier today calling for the health insurance company to end their unfair practice of cancelling coverage for women who were diagnosed with breast cancer.

"I am enormously pleased to see Wellpoint acting to end the unfair practices of rescission and implementing the required reforms early. While this decision will not help the women whose coverage was terminated, as they may have lost critical time in their fights against breast cancer, it will benefit countless women in the future who will be diagnosed with this disease," said Congresswoman DeLauro. "This is a great step towards ending rescissions is a direct result of Congress's landmark Patient Protection and Affordable Care Act, and I hope other health insurers will immediately follow suit, as we have seen many companies act early to extend dependent coverage to young adults under 26."

The text of the letter is below.

April 27, 2010

Angela Braly President and Chief Executive Officer Wellpoint, Inc. 120 Monument Circle Indianapolis, IN 46204-4903

Dear Ms. Braly:

We write to express our deep concern regarding recent media accounts indicating that WellPoint has engaged in systematic targeting and rescission of coverage of policyholders recently diagnosed with breast cancer. Specifically, last week's report from Reuters noted that your company has used a computer algorithm that automatically targets "policyholders recently diagnosed with breast cancer" in order to trigger an "immediate fraud investigation" leading to a cancellation of policies based on "either erroneous or flimsy information."

This recent article is the latest in a chain of disturbing reports about the practice of rescission. In 2009, Wellpoint reported to the House Committee on Energy and Commerce that it had saved $128.9 million as a result of rescissions between 2003 and 2007. At a June 16, 2009 hearing of the Energy and Commerce Subcommittee on Oversight and Investigations, Brian Sassi, president and CEO of the Consumer Business Unit for WellPoint, Inc., refused to commit that Wellpoint would never rescind another policy unless there was intentional fraud or misrepresentation on the application, citing inconsistent state laws on rescission.

As you know, the Patient Protection and Affordable Care Act specifies that rescission of policies except in case of fraud or misrepresentation of material fact will be illegal as of September 23, 2010.

This year alone, an estimated 192,000 American women will be diagnosed with breast cancer. Consumers who have consistently paid their premiums and who have obtained their coverage in good faith deserve the security of the health insurance they paid for should they become ill.

We therefore urge WellPoint to act immediately to end the deplorable practice of cancelling health insurance coverage for patients diagnosed with breast cancer or any other illness.

Sincerely,

Rosa L. DeLauro

Member of Congress