Blue Cross of California encouraged employees through performance evaluations to cancel the health insurance policies of individuals with expensive illnesses, Rep. Bart Stupak (D-Mich.) charged at the start of a congressional hearing today on the controversial practice known as rescission.
The state's largest for-profit health insurer told The Times 18 months ago that it did not tie employee performance evaluations to rescission activity. And executives with Blue Cross parent company WellPoint Inc. reiterated that position today.
But documents obtained by the House Committee on Energy and Commerce and released today show that the company's employee performance evaluation program did include a review of rescission activity.
The documents show, for instance, that one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.
WellPoint's Blue Cross of California subsidiary and two other insurers saved more than $300 million in medical claims by canceling more than 20,000 sick policyholders over a five-year period, the House committee said.
"When times are good, the insurance company is happy to sign you up and take your money in the form of premiums," Stupak said. "But when times are bad, and you are afflicted with cancer or some other life-threatening disease, it is supposed to honor its commitments and stand by you in your time of need.
"Instead, some insurance companies use a technicality to justify breaking its promise, at a time when most patients are too weak to fight back," he said.
Lawmakers -- Republicans and Democrats alike -- decried the practice of canceling policies of ill policyholders and grilled insurance executives about it.
The hearing began a day after President Obama outlined his proposals for revamping the nation's healthcare system. But any such overhaul would be incomplete without an end to rescission, said Rep. Henry Waxman (D-Calif.).
"It's shocking. It's inexcusable. It's a system we have in place that we have to stop," Waxman said.
The committee investigation uncovered several rescission practices that one lawmaker called egregious, including targeting every policyholder diagnosed with leukemia, breast cancer and 1,400 other serious illnesses. Such investigations involve scouring the policyholder's original application and years' worth of medical and pharmacy records in search of any discrepancies.
