KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Lawsuit Shows Insurer Targeted HIV Patients For ‘Rescission’

A court case has revealed that the insurer Fortis, now called Assurant Health, automatically targeted customers diagnosed with HIV for fraud investigations geared toward finding reasons to revoke their coverage, Reuters reports. After a computer algorithm initiated the investigations, "their insurance policies often were canceled on erroneous information, the flimsiest of evidence, or for no good reason at all, according to the court documents and interviews with state and federal investigators."

The court case was brought by Jerome Mitchell, who was diagnosed with HIV in 2002, at the age of 17, and told he would die in four years without treatment. Fortis dropped him from its rolls. Mitchell hired a lawyer to clear up the problem but Fortis ignored the lawyer's letters until Mitchell sued. He won a $15 million suit – later reduced to $10 million. "Assurant Health said that as a matter of policy it did not comment on individual customer claims. 'We disagree with certain of the court's characterizations of Assurant Health's policies and procedures in the Mitchell case,' it said in a statement provided by spokesman Peter Duckler." Other firms engage in the practice -- generally called "rescission." The purpose is to determine whether policyholders mislead insurers when seeking coverage. Assurant Health's CEO told Congress last June that recission is "one of many protections supporting the affordability and viability of individual health insurance in the United States under our present system." Assurant, he said, only revoked policies of costumers who "intentionally mislead his company" (Waas, 3/17).

Fox Business adds, "Shares of Assurant Inc. didn't appear to be fazed by the Reuters report, rising 1.4% to $33.60 Wednesday afternoon. Earlier in the day the stock hit a new 52-week high as Bank of America Merrill Lynch reportedly upped its price target from $39 to $42" (Egan, 3/17).

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