FACT SHEET
Prohibiting Rescissions
MAY 2012
When a woman purchases a health insurance plan, she expects it will be there for her when
she or a family member gets sick or injured. Unfortunately, this has not always been the
case due to a troubling insurance industry practice known as rescission – retroactively
canceling coverage, usually when an enrollee incurs high health care costs. The Affordable
Care Act (ACA) ends this practice, prohibiting all private health insurance plans from
arbitrarily rescinding coverage.
What Does The ACA Do?
The ACA protects women and families from
significant financial hardship and stress by
banning health plans from rescinding coverage
except in cases where the individual or employer
intentionally misrepresents material facts or
commits fraud when applying for coverage.
 This prohibition went into effect for all
private health insurance plans beginning on
or after September 23, 2010.
 The ACA also ensures that women and
families have the right to a full and fair
appeals process if their health plans rescinds
their coverage on the grounds of intentional
misrepresentation or fraud.
In April 2010, Reuters reported
that one major insurer was
targeting breast cancer patients
for rescissions, using a computer
algorithm to identify women
recently diagnosed with breast
cancer and trigger an investigation
into their records to find a pretext
for retroactively cancelling their
coverage.
— “WellPoint routinely targets breast cancer
patients,” Reuters, April 23, 2010.
How Did Rescissions Hurt Women and Families?
When health insurance was rescinded, women and families were left responsible for huge,
unexpected medical bills.
 Not only did women and families have to pay for all their health care costs without the
benefit of health insurance coverage going forward, but they were on the hook for costs
incurred when they were enrolled in their plan.

For costly conditions like breast cancer, a woman may go from paying a few thousand
dollars in copayments and deductibles to owing over $100,000 for full treatment costs,
including chemotherapy, in a year.
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 Women and families face these bills at a time when they are already under
substantial physical and emotional strain. And, as women are more likely to delay or
forgo needed care due to cost, the unplanned costs resulting from rescissions put
women at even greater risk of poor health going forward.
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Why Was A Ban Needed?
Insurers claim rescissions are an anti-fraud tool, but a 2008 Congressional investigation
found that health insurers would cancel coverage over minor and/or unintentional
discrepancies and omissions in a person’s application materials or medical records when
high cost health care claims were submitted. Examples included:
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 Rescinding coverage on the basis of typos in the application form;
 Rescinding coverage on the basis that individuals failed to disclose conditions they
were unaware they had;
 Rescinding coverage for family members incurring high cost claims, even if they were
not involved in the omission or discrepancy;
 Investigating the medical histories of all enrollees diagnosed with certain high cost
illnesses or conditions; and
 Evaluating employees based on how much money they saved the company by
retroactively canceling policies.
As one staggering example of abusive tactics, one major insurer was found to be targeting
breast cancer patients for rescissions, using a computer algorithm to identify women recently
diagnosed with breast cancer and trigger an investigation into their records to find a pretext for
retroactively cancelling their coverage.45
For more information, contact Kirsten Sloan, Vice President, at 202.986.2600 or
[email protected].
1 http://publications.milliman.com/research/health-rr/pdfs/cancer-patients-receiving-chemotherapy.pdf
2 http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2009/May/Women%20at%20Risk/PDF_1262_Rustgi_women_at_risk_issue_brief_Final.pdf
3 http://democrats.energycommerce.house.gov/Press_111/20090616/rescission_supplemental.pdf
4 http://www.reuters.com/article/2010/04/23/us-wellpoint-breastcancer-idUSTRE63M5D420100423
The National Partnership for Women & Families is a nonprofit, nonpartisan advocacy group dedicated to promoting fairness in the workplace, access to quality health care and
policies that help women and men meet the dual demands of work and family. More information is available at www.NationalPartnership.org.
© 2012 National Partnership for Women & Families. All rights reserved.
NATIONAL PARTNERSHIP FOR WOMEN & FAMILIES | FACT SHEET | PROHIBITING RESCISSIONS
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