Half a Million Americans Denied Health Coverage

The four largest health insurance companies in the US denied coverage to more than half a million individuals because of their pre-existing conditions from 2007 to 2009, according to a congressional investigation.

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On average, the four companies – Aetna , Humana , UnitedHealth Group and WellPoint – denied one out of seven applicants’ coverage based on conditions such as pregnancy, angina, diabetes and heart disease.

The investigation found that the number of people who were denied coverage increased about 49 per cent from 2007 to 2009. In that period, the groups refused to pay 212,800 claims for individuals who were already insured based on their previous medical conditions.

New revelations about the extent of denials based on pre-existing conditions comes at a crucial time for Democratic lawmakers.

Many of them have come under pressure in the lead up to the November mid-term elections because of their support for President Barack Obama’s healthcare reform law, which was passed by Democrats in Congress in March.

Polls show that roughly 50 per cent of voters disapprove of the wide-ranging new law.

But one of the most universally popular provisions – which will not take effect until 2014 – makes it illegal for insurance groups to deny an individual coverage based on a person’s health status or pre-existing condition.

Democrats have argued that the provision is economically feasible because the new law also includes a mandate forcing every individual to be covered, one of the least popular aspects of the bill.

Republican candidates for Congress have vowed to “repeal and replace” the healthcare law, but keep the new provision on pre-existing conditions. They have not, however, explained how they would extend coverage to those individuals without a broader mandate.

The congressional investigation by Democrats on the House energy and commerce committee was initiated shortly before the landmark vote on healthcare reform, when Congressman Henry Waxman, chairman of the committee, asked each of the companies for extensive information about their denial policies.

Each of the companies complied with the request. The congressional probe found that each company saw its policy on pre-existing conditions as a key area of growth.

For example, internal documents by a company that was not identified by the committee showed that executives were considering practices such as denying payments for drugs related to pre-existing conditions and linking additional claims to pre-existing condition exclusions as ways to limit the amount of money the company had to pay for claims.

Although the committee found that a total of 651,000 individuals were denied insurance coverage in the individual market between 2007 and 2009, investigators said the number was likely “significantly higher” because the figure did not include individuals who were discouraged from applying for coverage by insurance agents.

The four companies covered about 2.8m people in the individual market in 2009. In some cases, the denials were issued without review.

A memo circulated by one unidentified company in 2006 listed 14 medical categories that did not require review, including: any woman who was pregnant or had been treated for infertility within five years.