"Health Net is prohibited from rescinding policies until an external review is setup..."
"Health Net is evaluating it's underwriting policies and relationship with brokers" - that is their response? I guess that means the girl that died was sold by a broker, not direct sales. I hope he has a 9mil E&O policy.
I believe the fine was 9mill.
CA might become the first state to prohibit or highly restrict recessions.
[COLOR=#000000]Dear Broker,[/COLOR]
[COLOR=#000000]You may have heard news reports about an arbitration award involving Health Net. The case focused around the rescission of an individual member's policy. The member suffered from a serious illness and anyone would feel sympathy for her.[/COLOR]
[COLOR=#000000]We want everyone who properly obtains a Health Net policy to get the care they need. So, we want everyone who applies for a policy to understand how important it is to give us accurate information. If they don't, it undermines the underwriting process. [/COLOR]
[COLOR=#000000]We are writing to remind you of steps you can take to help us avoid rescissions in the future;[/COLOR]
Make sure your clients understand the importance of being completely truthful and accurate in their application.
Work with your clients to verify all of the information on the application. When we have rescinded policies because of inaccurate information, we believed that the individual knew that certain information was inaccurate and should have been disclosed.
Ask about other family members who are applying. Make sure the health histories for all family members are complete.
Always ask the applicant to personally fill out the application and sign it.
Remind them that failure to disclose a material fact could have serious consequences including the loss of insurance.
If there's any doubt about whether a fact is material, it's always best to disclose it on the application form.
[COLOR=#000000]We also wanted you to understand our position on the recent case. Here is the statement we issued to the news media:[/COLOR]
[COLOR=#000000]Yesterday we received an arbitration decision in a case involving the rescission of an individual insurance policy. While we do not agree with all of his conclusions, the arbitrator raised some serious concerns. Some of these concerns have already been remedied over the past few years, and we intend to address the remaining issues he raised. [/COLOR]
[COLOR=#000000]Effective immediately we are doing the following things: [/COLOR]
[COLOR=#000000]First, we will rescind no policies in the future without a binding external third party review process.[/COLOR]
[COLOR=#000000]Second, we will ensure our application and underwriting process is clear and understandable, and that we get all necessary information before issuing a policy.[/COLOR]
[COLOR=#000000]And third, we will do a comprehensive review of all parts of the process including enhanced broker review, training and education. [/COLOR]
[COLOR=#000000]We will be making specific announcements in the coming weeks. We will also urge the passage of legislation in California to address these matters on a statewide basis.[/COLOR]
[COLOR=#000000]We take this very seriously and are committed to resolving these issues.[/COLOR]
[COLOR=#000000]We appreciate your support in working to provide affordable coverage to more Californians who are not covered by group policies such as employer coverage. We remain hopeful that the larger discussions in Sacramento and in Washington about health-care reform will help resolve some of the issues that are raised by this case. In the meantime, we look forward to working closely with you - and with health-care providers - to ensure that we serve as many individuals as possible.[/COLOR]
[COLOR=#000000]Sincerely, [/COLOR]
[COLOR=#000000]Mark J. Morgan[/COLOR]
[COLOR=#000000]Commercial Officer[/COLOR]
Last edited by JRoot : 02-23-2008 at 02:46 AM.
Reason: beer
If this holds up IMHO, I wouldn't want to be selling Health Insurance! Full underwriting before any policy issued, if not simply lie and get approved and the fat lady is singing.
It'll end up like auto, a 60 day recission policy by law. The way it should be.
The issue is with auto, they can non-renew you at the end of the policy, with health, there is no such concept. This, unfortunately, is what drives the price of health insurance up so high. Fortunately, this is what protects individuals with long term illnesses. No happy medium here.
It'll end up like auto, a 60 day recission policy by law. The way it should be.
The issue is with auto, they can non-renew you at the end of the policy, with health, there is no such concept. This, unfortunately, is what drives the price of health insurance up so high. Fortunately, this is what protects individuals with long term illnesses. No happy medium here.
Dan
Interesting, 60 days for the Carrier to cancel and then have an option of non-renew. Ouch, that seems like a nightmare for anyone that gets sick!
The sixty day thing, that has some merit to it, yet I'm thinking that would only send the message to Insurers they have sixty days to research the individual, let us nickname it, "The Sixty Day Anal Exam Period".
The non-renew thing will never happen for health. The 2 year lookback to rescind is on its way out the door, with the exception of blatent fraud (i.e., you have cancer and neglected to mention it... not something you can forget).
This will push carriers back to doing full underwriting before they issue, not an overwhelming bad thing, though it will slow things down.
Now, all of this is just my ramblings, I don't know of any real initiative underway to push this.
I'd like to ask HealthNet what kind of mandatory agent training is in place which assures the agent fully understands the application and underwriting process.
I think this is all BS is you ask me. You put untrained agents together with clients who don't know how to properly fill out and app and the carriers scratch their heads when something goes south.
Every carrier in the country needs a mandatory agent training program - period.
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
Agreed however then you get into what level of training is industry standard, etc., etc., They can start by training their own people, who are completely clueless.
In order to fix the system you would need:
-Standardized applications with NO "ever" question, 5 years max in my opinion should be the look back
-Standardized plans select A-Z so the client knows the minimum coverages he or she is purchasing.
-No more rescinds, period. Do your underwriting upfront, not up to two years later.
I am not preaching GOVERNMENT regulation, but the industry self regulating. It will never happen, and the government will step in - guaranteed.
I'd like to ask HealthNet what kind of mandatory agent training is in place which assures the agent fully understands the application and underwriting process.
I think this is all BS is you ask me. You put untrained agents together with clients who don't know how to properly fill out and app and the carriers scratch their heads when something goes south.
Every carrier in the country needs a mandatory agent training program - period.
Agreed. But it's all ideology - the carriers just don't care. They see it as more distribution expense...
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[COLOR=blue]Don't steal - the government hates competition.[/COLOR]
Problem is the carriers need some type of protection from clients who flat out lie. I had a policy yanked and my client almost chuckled - had a recent heart attack, said he knew he wouldn't get coverage if he disclosed it and just "took a chance."
There is no easy solution but there needs to be a solution. The carrier can't be expected to eat it if a client who's 5.5 and 260 puts 160 and says "screw it."
What we need is all medical records online....which is coming. Then instead of an APS 6 week nightmare, underwriters can look at health history instantly.
We still need all carriers to have a mandatory agent training program. Companies need "secret shopper" who randomly contact agents and rate their sales process.
My friend's wife is a secret shopper for Sears. She has a 6 store territory and simply poses as a shopper who needs help, then writes up a survey.
BMW has secret shoppers - corporate employees posing as customers to ascertain knowledge and sales techniques of their reps.
The ugly truth is simply; the carriers want apps and nothing else. They don't care about the quality of the app since they can yank it at will.
Gov't stepping in isn't necessarily a bad thing. Let's take a look at the late 1800's to the early 1900's and look at how private companies operated without any regulation.
The gov't stepped into private industry with minimum wage and labor laws. If not, then people would be working for $1.50 an hour for 60 hour weeks.
Although not direct analogies to what we're discussing my point is just because the gov't steps in doesn't make it a bad thing.
The gov't stepped into private industry with minimum wage and labor laws. If not, then people would be working for $1.50 an hour for 60 hour weeks.
Now you hit MY hot button. That is just complete bullshit. Minimum wages do nothing but keep (primarily young minority) people from entering the workforce. People with any level of skill earn more than minimum wage.
Rick
------------------------------------ ILIAA
Training, Community, Support, and Success Independent Life Insurance Agents Assn rick@iliaa.org
Work off the clock or you're fired. Ohhh...that's illegal? When then take what you're making from $6.25 an hour and go sue us.
Happened to me and I lost a job over it. When I was a teenager I worked for Color Tile basically doing whatever they needed me to do. After my shift one day I had punched out - my manager then tells me he needs some help but it has to be off the clock - throws "team work" and "loyality" in my face.
I said no and left. Guess what my schedule looked like the following week?
However, in those case I "could" have sued. Imagine no regulation.
HealthNet
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