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Consider this nightmare scenario: you get sick and your health insurance company cancels your policy. A House of Representatives committee recently called in insurance executives to explain how this could happen. NPRs Joanne Silberner was there.

JOANNE SILBERNER: When an insurer cancels a policy after the policyholder files a claim its called rescission. Insurers do it when they find a health detail missing in the original application. People who have insurance on their own, rather than through their employers, are at risk.

Congressional investigators found 20,000 cases of rescission in five years of records from three insurers. Sometimes the policy was rescinded because people deliberately left out parts of their health histories. But some omissions were inadvertent or immaterial. And in those cases insurers should not have done it, says Congressman Barton Stupak, a Michigan Democrat.

Representative BARTON STUPAK (Democrat, Michigan): Look at - they sign you up for health insurance, and as long as you're healthy and you're paying your premiums everything is wonderful. Soon as you get ill, when you need them to stand behind you, theyre finding excuses.

SILBERNER: Some insurers gave employees bonuses for cutting people off and instituted automatic look backs when people filed for expensive medical care. The anger over these practices is bipartisan. Heres Republican Joe Barton of Texas at the hearing.

Representative JOE BARTON (Republican, Texas): There is no reason on Gods green earth that somebody ought to have their health insurance revoked because of some inadvertent omission thats not related to the claim thats being submitted to the health insurance company.

SILBERNER: But thats what happened to Bartons constituent, Robin Beaton. On the Friday before a scheduled Monday mastectomy she got a cancellation note from her insurer. She hadnt told her insurer about having had acne or a rapid heartbeat years earlier.

Ms. ROBIN BEATON: I pray no one has to go through the sheer agony that I have had to endure for one year. I did not deserve to have my insurance canceled.

SILBERNER: It took a phone call from Barton to the head of her insurance company to get her mastectomy covered.

Otto Raddatz of Illinois was awaiting a stem cell transplant for lymphoma. He got canceled because of an unintentional omission. His sister Peggy Raddatz testified that his doctor had not told him about a weak blood vessel and gallstones. The insurer reversed its decision only after she got the state attorney general involved.

Ms. PEGGY RADDATZ: Had they not been able to find his doctor who was retired and on a fishing trip in another state, they still might not have believed him.

SILBERNER: Three insurance company executives testified that they have to be able to retroactively cancel policies. Otherwise they might sell policies without knowing the true risk.

Richard Collins is CEO OF Golden Rule Insurance Company.

Mr. RICHARD COLLINS (Chief executive officer, Golden Rule Insurance Company): Under our current system failure to act on these cases is fundamentally unfair to those working families that play by the rules, because it would severely limit our ability to provide quality and affordable health insurance.

SILBERNER: The three insurance CEOs suggested a solution: a system where everyone has insurance, so the cost of illness are spread over more people. The committee members had their own, immediate solutions - insurers could vet applications as they come in rather than looking back after someone gets sick, and the companies could only cancel people who had knowingly lied.

Representative Barton Stupak tried to get the insurers to promise not to do anymore rescissions.

Representative STUPAK: Let me ask each of our CEOs this question, starting with you, Mr. Hamm. Would you commit today that your company will never rescind another policy unless there was intentional fraudulent misrepresentation in the application?

Mr. DON HAMM (Chief executive officer, Assurant Health): I would not commit to that.

SILBERNER: Nor would the other CEOs, which elicited a warning from Representative Joe Barton. If the insurers don't figure out a way to make rescissions more fair, Congress may find a way to do it for them.

Joanne Silberner, NPR News, Washington.

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