Recision is the act of rescinding and is specifically used to refer to the policy of health insurance companies revoking health care from clients once they become diagnosed as ill. Last weekend’s This American Life had a segment on this very issue. Last month, a House sub-committee interrogated representatives from three major insurance companies to investigate their policies of actively searching for excuses to deny health coverage for the sickest of patients. For example, allegedly insurance applications contained difficult to understand language on purpose with the hope that a patient might make a mistake on them. If said patient then becomes very ill, the company has the grounds to deny coverage (even though they accepted payments all along from this patient). In the culmination of this hearing, all three companies were asked to commit to not rescind any policy unless there was “intentional fraudulent behavior” on the part of the client. All three companies refused on the grounds that state laws did not force them to do so. There it is, EMAIL YOUR REPRESENTATIVES.
I recently spoke to Jess Roney, a history professor at Ohio University, about her research on Colonial American voluntary organizations in Philadelphia. These included some of the earliest insurance companies in the country, including the fire insurance company popularized by Benjamin Franklin. “They were more like mutual-aid societies,” she said. That’s exactly the concept that has been lost: a group of people concerned about a the possibility of a catastrophe (in this case, fire), pool their money together so as to aid any one of them on whom that catastrophe falls. It had the added benefit, Jess told me, of creating a mutual responsibility. If you saw a house on fire that was protected under your insurance, you would rush to the aid of putting it out because you knew that it was in your economic interest to reduce the damage. To be sure, some houses, particularly wooden ones, were denied coverage — this was not a charity. The reason was, however, that coverage was denied because it was an undue burden on the other members. Under this system, recision would have been a bad policy because your vote to deny a fellow contributor today could easily be turned on you tomorrow.
Modern insurance companies have lost that sense of being a mutual-aid society, and recision is only one example of that. The problem is that the company itself, formerly just a money-management tool, has now become an interest in itself. What used to be an agreement between a group of contributors is now a corporate entity that is built, not upon redistributing wealth to those in need, but upon making a profit. The day that insurance companies became profit-seeking organizations was the day recision became an effective policy. It is also the day that an insurance company ceased to be a mutual-aid society.