Shooting Yourself In The Foot

And no insurance to cover it.

Rescission -- the technical term for canceling coverage on grounds that the company was misled -- is often considered among the most offensive practices in an insurance industry that already suffers from a distinct lack of popularity among the American public. Tales of cancellations have fueled outrage among regulators, analysts, doctors and, not least, plaintiffs' lawyers, who describe insurers as too eager to shed patients to widen profits.

Those sentiments have become central to the health-care debate, as President Obama tries to tap into dissatisfaction with the insurance industry to build support for reform efforts. Each of the bills pending in Congress would prevent insurers from rejecting clients because of preexisting conditions.

No one claims to know how often policies are canceled -- in large part, congressional investigators say, because insurance companies are regulated by a patchwork of state laws and policies. But the practice is common enough to spur lawsuits and state regulatory action.

In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.

"This is probably the most egregious of examples of health insurers using their power and their resources to deny benefits to people who are most in need of care," said Gerald Kominski, associate director of the Center for Health Policy Research at the University of California at Los Angeles. "It's really a horrendous activity on the part of the insurers."

Insurance company officials say they need to be able to cancel policies to control fraud, which by some estimates reaches $100 billion annually.

"We do not rescind a policyholder's coverage because someone on the policy gets sick," said Peggy Hinz, a spokeswoman for Anthem Blue Cross, a subsidiary of WellPoint. "We have put in place a thorough process with multiple steps to ensure that we are as fair and as accurate as we can be in making these difficult decisions."

Americans are mostly satisfied with their health care coverage because they've not had to use it. In America, if you actually have to use your health insurance policy to the point where you're no longer profitable to the health insurance company, they have people whose job it is to find a reason to deny payment because you have committed fraud. You get bonuses if you find candidates for rescission.

Nobody ever loses their health insurance because they got sick. They lose it because the health insurance company calls it "fraud". This happens to the tune of $100 billion a year apparently. Poor insurance companies! How dare you get sick and use their money to pay for it. They have a right to make a profit you know!

Why, what harm can come from putting a profit motive on health insurance?

The good news is insurance companies continue to do stupid things like this that will eventually give President Obama's plan the win. People hate "government health care". They hate insurance company rescission practices more.