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Health Insurers Agree to Stop Dropping Sick Customers Ahead of Schedule

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Two of the nation's largest health insurers announced this week that they will no longer drop customers who become sick. The move puts them in compliance with a key provision in the new health care law months ahead of schedule.

Wellpoint announced yesterday it would enact the new policy on May 1, and UnitedHealth Group announced today it will do so effectively immediately.

The practice of dropping sick customers, known as "rescission," was banned in President Obama's health care reforms, and the companies would have had to comply by September. They have been under pressure from the administration and Democrats in Congress to change their policy sooner.

"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," UnitedHealthcare President Gail Boudreaux said in a statement, according to Reuters.

Several leaders in the House of Representatives on Tuesday sent a letter to WellPoint, UnitedHealth and other insurers asking them to begin limiting rescission immediately, the Associated Press reports. They also asked the companies to start independent, third-party reviews of rescission cases.

Last week, Health and Human Services Secretary Kathleen Sebelius said she was "surprised and disappointed" by a Reuters report alleging that Wellpoint uses a computer algorithm to target women with breast cancer for rescission. WellPoint responded that it uses such an algorithm for all sick patients who may have known about their conditions before applying for insurance, and it does not single out breast cancer patients.

A number of insurers also recently agreed to immediately enact the new requirement allowing children to stay on a parent's health care plan until the age of 26.

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