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Illinois health plans will face heightened scrutiny if they revoke members' coverage, under new rules announced by the state's insurance director.
Michael McRaith released a bulletin to all insurers Dec. 21, 2009, alerting them that, effective immediately, if they rescind a policy and the consumer files a complaint with the insurance department, the company would be required to hand over complete copies of its underwriting policies as part of the department's review.
The bulletin cited state law that says an insurer may rescind coverage only "when an insured has provided a false statement on an application which materially affected the acceptance of a risk or hazard." The department can determine if that happened only if it looks at the company's underwriting practices, the bulletin said.
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