Insurer UnitedHealthcare ends practice of dropping clients ahead of law

Private insurer UnitedHealthcare said it has ended its “limited” use of rescission, the practice of dropping patients from insurance coverage after they become sick.

The new health care reform legislation passed in March made rescission illegal. The insurance companies had until September 23, 2010, to end the practice.

“In the spirit of the recently passed health reform legislation, UnitedHealthcare moved quickly to eliminate the practice of rescission, except in cases of fraud or intentional misrepresentation of material fact,” said Gail Boudreaux, president of UnitedHealthcare, in a statement.  “We continue to find ways to ensure that the new health care reform law can be implemented effectively for the benefit of all Americans and achieve broader access to quality health care."

UnitedHealthcare claims a customer base of 25 million people, 600,000 physicians and care professionals and 5,000 hospitals nationwide.

WellPoint Inc, announced Tuesday that it would end the rescission practice on May 1 after a report by Reuters last week documented that the company worked routinely and aggressively to deny coverage to, or cancel the existing polices of, women after they were diagnosed with breast cancer. WellPoint said the report was inaccurate after being chastised by Health and Human Services Secretary Kathleen Sebelius and several lawmakers.