Section 2712- Prohibition on Rescissions
Sec. 2712 Of the Health Care Reform Bill is titled "Prohibition on Rescissions. To break it down, the section starts with saying that a company cannot take back their plan once the enrollee is already covered under that plan. This company could be a health insurance issuer group or a group health plan. There is one stipulation however, the section does not cover individuals who have committed fraud or makes an intentional "misrepresentation of material fact". This would restrict rescission in such cases to circumstances where the "misrepresentation of material fact" was either intentional or the health policy of plan itself prohibited the intentional "misrepresentation of material fact". So basically once a person is under coverage, they cannot have their plan taken back from them, unless they have committed this "misrepresentation of material fact".
The "Prohibition on Rescissions" would benefit a majority of our population. Everyone insured or becoming insured would be able to keep their health care, unless they have violated the terms of the bill. This ban on rescissions would also affect health insurers subject to the bill and companies offering health insurance plans. Patients would not have to worry about loosing their coverage after being diagnosed with a serious disease for example.
The only downfall I see to this section is that they need to define their "misrepresentation of material fact". It is too vague as it sits right now. What's stopping doctors and insurers now from looking at records of patients and saying "Oh you didn't tell me when you were younger you had an asthma attack? (once the patient has been diagnosed with lung cancer). I'm sorry but that's intentional "misrepresentation of material fact"". I think that they need to define the circumstances that fall under this misrepresentation category. Overall, I think that this section has many benefits to the all the American's insured or who are becoming insured.
ACTUAL TEXT:
'SEC. 2712. PROHIBITION ON RESCISSIONS.
''A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not take back such plan or coverage with respect to an enrollee once the enrollee is covered under such plan or coverage involved, except that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional mis-representation of material fact as prohibited by the terms of the plan or coverage. Such plan or coverage may not be cancelled except with prior notice to the enrollee, and only as permitted under section 2702© or 2742(b).
