Insurer Denies Teenage Girl Coverage Because She Was Diagnosed With an Overbite at Age 8

Insurance company cancelled teenager’s coverage because she was diagnosed with an overbite at age 8.  A suburban Chicago teenager had her healthcare coverage rescinded when her parents’ insurance company learned that she had been diagnosed with an overbite at age eight. An orthodontist and braces cured the overbite, but the insurer cancelled the girl’s coverage by claiming it was a pre-existing condition.  The girl’s parents fought back and – thanks to strong support from Illinois insurance regulators – the coverage has now been reinstated.

Thanks to healthcare reform legislation, this practice – known as rescission – will no longer be allowed as of late September except in cases where fraud is involved.  Illinois has one of the nation’s highest rescission rates with 12.9 for every 1,000 policies written.  The girl’s father, an attorney employed at a small firm, buys individual coverage for his family.  Insurance regulators say that rescission is most common in these circumstances.  People who are covered by company-sponsored programs rarely face rescission.  According to the girl’s father, “We didn’t try to hide anything.  Our orthodontist told us her mandibular hypoplasia was routine, and it was nothing the insurance company even asked us about on our application.  From our perspective, they didn’t even ask for the names of any of our children’s dentists or orthodontists.”

“There’s now a defined legal standard for when a rescission is appropriate,” said Michael McRaith, Illinois Insurance Director.  “In Illinois, our law was ambiguous, vague and left wide latitude and discretion with the insurance industry.”  The insurance industry defends rescissions as a necessary business practice when people misrepresented or lied about their medical histories on their applications.  Rescissions affect approximately seven percent of the population with private insurance who purchase individual policies.  Robert Zirkelbach, spokesman for America’s Health Insurance Plans, a lobbying group, said “Rescissions are very rare.  They are only used as a last resort.”

Congressional Democrats take another view.  “It was viewed by Congress as the tip of the spear,” said Representative Jan Schakowsky (D-IL).  “It typifies the practices of the insurance industry to maximize their profits that were so clearly anti-consumer and harmful to people who were counting on their health insurance at the moment they needed it the most.”

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