Aetna, the third-largest US health insurer, has announced that it will let an independent panel of physicians decide whether to rescind health insurance policies for sick plan members suspected of submitting false or incomplete information on their applications. Their decision comes amid recent scrutiny of alleged inappropriate policy rescissions in several states, including California.
To date, no regulatory action has been taken against Aetna, but the issue has generated public attention and Aetna is using this announcement to assure consumers that they are addressing the issue head on. Aetna acknowledges that, in some cases, policies must be rescinded; but is using the independent review to assure Aetna consumers that they will always be treated fairly and have access to an independent process.
Proposed policy rescissions will be reviewed by a panel of three independent physicians, whose decisions will be binding for Aetna. Members who want to appeal the rescissions will have the option of going through Aetna's internal appeals process or going directly to the panel. Those who appeal to the panel can still appeal directly to the company.
The insurance industry defends a certain number of cancellations as necessary protection against fraud by those applying for coverage. Insurers further assert that abuses skew the assessment of how risky and expensive it will be to cover someone and raise prices for honest customers.
Consumers have said that some insurers use confusing application forms that elicit incomplete disclosures, which can then be used to later justify cancellations.