Kaiser Permanente's Statement On Rescinded Insurance Coverage
Kaiser Permenente says voluntary Fresh Start program will provide health insurance coverage for previously rescinded California members.
Statement from Jerry Fleming, Senior Vice President and National Health Plan Manager, Kaiser Permanente, regarding coverage for former Kaiser Permanente members
Today, Kaiser Permanente is announcing a voluntary fresh start program for former members in California whose health care coverage was previously rescinded. This program will provide those persons with the option to purchase individual health insurance coverage going forward and provide a fair and expeditious process to resolve any disputes that may remain.
Kaiser Permanente only performed rescissions for a little over two years, and we voluntarily stopped in October 2006. We want to clear up past issues so we can move forward towards a longer-term solution addressing the larger issues of affordable health care coverage.
We believe this voluntary "Kaiser Permanente Fresh Start Program" for previously rescinded members is the quickest way to give people what they really need - health insurance. The issue of whether people either intentionally or unintentionally gave inaccurate information on their coverage application is set aside for the purposes of getting a fresh start on their coverage.
Kaiser Permanente has decided to act now to take the consumer out of the middle of this uncertainty over the state's framework and guidance about medical underwriting and policy rescissions for individual plan applicants. The uncertainty is over issues such as an applicant's duty to provide complete and accurate information when applying for coverage, a health plan's duty to verify the completeness and accuracy of that information prior to enrollment, and the circumstances in which a rescission or coverage cancellation is appropriate. We want to advance the dialogue about the appropriate way to solve the problems surrounding availability and costs of health insurance coverage and to clarify the uncertainty that exists. But before we can do that effectively, we need to first resolve these issues from the past.
Under the "Kaiser Permanente Fresh Start Program," we are doing three things:
In the coming weeks, we will begin contacting former members who have not already resolved any dispute with us to voluntarily offer them the option of purchasing individual coverage from Kaiser Permanente going forward, without the need for medical review, as long as they meet non-medical underwriting criteria, such as residing in the service area.
Second, we will refund amounts collected, if any, for medical service that had been provided by Kaiser Permanente.
And, we have worked with California Department of Managed Health Care to provide a fair and expeditious dispute resolution and review process to resolve claims related to the rescission.
Kaiser Permanente only used rescission for a little more than two years. We voluntarily stopped nearly two years ago, in October 2006, when it became apparent that there was uncertainty over when it was considered proper to rescind. Up until that time we had good reason to believe that we acted appropriately, reasonably, and in good faith when we learned that someone had supplied inaccurate information on their application form. A portion of our rescissions were based on members saying they were not pregnant at the point of application when in fact, they were pregnant. The DMHC upheld our rescissions over 90 percent of the time when members appealed our decisions. We were upheld in 67 of 71 appeals by the DMHC.
In 2004 and 2005, the DMHC did not reverse any of our rescission decisions - every appeal was upheld. In 2006, we started seeing a few reversals. We voluntarily stopped rescission cases at that point while we and DMHC engaged in dialogue about the appropriate standards and approaches to be followed when an applicant gave us inaccurate information on an application.
Our intention has always been to perform the process of verifying that data fairly and correctly. Our Fresh Start program is our way of taking the consumer out of the middle of this uncertainty. It also allows us to resolve past issues expeditiously so that we can begin to move forward. Going forward, Kaiser Permanente and the DMHC now have a shared goal of clarifying expectations of applicants, plans, and the DMHC, and that is why we are here today. If any of our members have questions, they may contact us at (866) 525-0603.