Just a few days before her scheduled mastectomy, Robin Beaton's insurance company retroactively canceled her policy because she had failed to inform them of her history of acne and a rapid heartbeat.
http://www.npr.org/templates/story/story.php?storyId=105680875&ft=1&f=1001According to a new report by congressional investigators, an insurance company practice of retroactively canceling health insurance is fairly common, and it saves insurers a lot of money.
A subcommittee of the House Energy and Commerce Committee recently held a hearing about the report's findings in an effort to bring a halt to this practice. But at the hearing, insurance executives told lawmakers they have no plans to stop rescinding policies.
The act of retroactively canceling insurance is called rescission. It happens with individual health insurance policies, where people apply for insurance on their own, not through their employers. Their application generally includes a questionnaire about their health.