The Obama Administration has demonized insurance companies for dropping policies, much as it demeans other industries.
I was a senior banking and insurance analyst in the past and keep in touch with the business. I wish top members of the administration were as informed.
A policyholder can have his or her policy dropped for a number of valid reasons:
One: Material lying about preexisting conditions. No one should be allowed to buy fire insurance while a fire is in progress.
Two: Fraud. Material misrepresentation which is so basic that the company would otherwise not have accepted the risk
In one of the insurance companies independently studied, only 0.1% of policies or 20,000 cancellations were made. It sounds like a lot when politicians talk, but it’s a study from millions of policies over a 5 year period.
On the other hand, our government does not tell you that it cancels 6.8% of Medicare claims. Think of that the next time you consider truth in political advertising, especially when you hear about government health care. (See the Earl J Weinreb NewsHole® comments.)
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