Insurance Comp. Must Pay $10 Million For Revoking Policy Of Teen With HIV

The South Carolina Supreme Court has ordered an insurance company to pay $10 million for wrongly revoking the insurance policy of a 17-year-old college student after he tested positive for HIV. The court called the 2002 decision by the insurance company "reprehensible."

That appears to be the most an insurance company has ever been ordered to pay in a case involving the practice known as rescission, in which insurance companies retroactively cancel coverage for policyholders based on alleged misstatements - sometimes right after diagnoses of life-threatening diseases.

The ruling emerges from a conservative Southern state with one of the most pro-business climates in the country. And it comes as progressive Democrats on Capitol Hill are pressing for health care reforms, such as a public insurance option, that reflect wariness about the private insurance industry's motives.

...In Febuary 2008, a private arbitration judge in Los Angeles ordered Health Net Inc. to pay more than $9 million to a breast cancer patient whose health insurance it revoked shortly after her diagnosis and while she was undergoing chemotherapy. The plaintiff in that case, Patsy Bates, a then-52-year-old grandmother and hair-salon owner, was unable to continue her chemotherapy for several months.

...retired Texas nurse, Robin Beaton, who had her heath insurance canceled by her insurance company as she was about to undergo breast cancer surgery. As a result, Beaton had to delay her surgery for five months. In the interim, the size of the mass of her tumor had grown from 2 centimeters to 7 centimeters, greatly reducing her chances of survival.

...President Obama mentioned a similar case during his speech to congress - A "woman from Texas was about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne," the President asserted in his speech, "By the time she had insurance reinstated, her breast cancer more then doubled in size. This is heart breaking. It is wrong. And no one should be treated that way in the United States of America."

Read more at: http://www.huffingtonpost.com/2009/09/17/insurance-company-must-pa_n_289841.html