our panel today are for-profit r was the cross and blue shield. i wonder whether the cross and blue shield is not in one of our panelists today. clearly as a non-profit company, they would not have a purely profit driven motived to engage in this type of behavior. this is curious. i think there are a number of questions that we would like to propose to a company that functions as a non-profit. it is the best possibility of each insurance company to do their due diligence before contracts are entered into. they should not have a lazy and incomplete underwriting.

>> thank you for having this critical hearing. revision of covered by insurance companies put dollars ahead of the lives of americans. i exaggerating. accountability is something that i have fought and advocated for at every stage of my professional life. during my time as a representative in the ohio general assembly, i worked on behalf of ohioans to ensure when benefits were promised, benefits were given. and now i'm here in congress. to continue that fight. recision of coverage is a problem that we in congress are seeking to eliminate, and it's our hope, you've heard from the comments here, that when we have finished reforming our health care system, coverage discrimination will be a thing of the past. but today it's still a problem that exists and must be eliminated. when a health insurance policy recision occurs, it creates waves throughout the entire health care system. make no mistake, these decisions

deprive people of needed care. they deprive hospitals and doctors of the reimbursement they have ened for their service. for some, a recision is a costly process that can result in a doctor or hospital having to seek payment from the individual. for others, it means a delay and access to a life-saving procedure or treatment. that's unacceptable. today we will hear from citizens, and i thank you all for coming to provide your testimony and your stories. about your lives that have been turned upside down by the insurance industry policy of recision. we'll hear from executives who will tell us that in the name of uncovering insurance fraud and corruption, they had no choice but to remove these beneficiaries from their rolls. but i think the testimony of the people who have lived through this trauma will tell a different story. the number of uninsured in this country is now thought to be 47 million. it's a major flaw in our country that so many people go without

their basic rights to have health care coverage, and millions more who have insurance still don't get the care they need when they need it. it's hard to understand how we allow those who are legitimately covered to join the ranks of the uninsured due to the stroke of a pen or the decision of an insurance company executive. unfortunately, mr. chairman, i have another hearing that is going on simultaneously with this one. so i'll be shuttling back and forth. but i want the panelists to know, that i will be listening carefully to the testimony, both for myself and the people of ohio that i am so honored to represent. and i thank you all again for coming. and i thank you, mr. chairman, for your attention to this matter. >> i thank you, police sutton. members will be coming back and forth as there's a committee two floors up, telecommunications, also meeting. and in that donna christianson

has submitted her opening statement. are you going to tell us how you broke your leg? >> well, i wish there was a dramatic story, mr. chairman. although it was in a fairly dramatic place. i did go to guantanamo bay yesterday and fell. and ended up breaking my foot in two places. i hope soon, with the help of the attending physicians, i'll have a boot or a cast or something. that was just yesterday. >> we wish you well. >> thank you. >> thanks for being here. >> i am grateful that i do have good health insurance to cover that. i appreciate today's hearing examining one of the truly egregious practices occurring in the individual health insurance market. i want to extend a special welcome to miss peggy raddatz from my home state, from la grange. i thank you for being here and

sharin your family's story with us. i know it isn't always easy to discuss personal matters. but you certainly are helping us to make better health care policies. and i thank the witnesses for helping us. when a consumer goes to buy a health insurance policy they try to identify the best policy to heat meet the health care needs of their family. at no time do they imagine that once they buy a policy, they might get sick and their insurance will simply rescind their policy and leave them without coverage, but with a high pile of bills. the practice of post-claims underwriting in the private market is wrong and we should prohibit it. let's face it uks it's already hard enough for an individual or small business owner to find health insurance. in my state of illinois, there is no requirement that insurers take all-comers. i've heard from constituents over and over again who are unable to find a policy really at any price. those who do get through the

insurance industry gauntlet know they're not home free. they know they may face high out-of-pocket costs, and doctor prescribed treatments, prior approval requirements, caps on services, and other devices that are designed to limit the insurance company payments. but few, no. when they need care, the insurance company has been collecting their -- that has been collecting their premiums may now go back and comb through their personal history in order to find an excuse not to pay, just when the policyholder needs the coverage the most. there are some who argue that recisions are used to stop fraud on the part of enrollees who misrepresent their health histories in order to obtain coverage. one has to wonder why we would put up with a health care system when people have to hide their illnesses in order to get access to care. but we also know that this isn't about that. it's about a company -- most

often about a company looking for an undisclosed headache ten years ago to deny coverage for a brain tumor today. it has less to do with the consumer and a lot to do with company profits. as we move forward with health care reform, we have to put an end to practices that discourage patients from seeking out care. insurance coverage should be a pathway, not a barrier to care. mr. chairman, i look forward to working with you to improve care coverage, refocus our attention on patients. and i really again thank our witnesses for being here today. >> thank you. >> thank you, mr. chairman. this is a very important hearing. i'd like to start by talking about the very concept that we're here to discuss. because the term post-claims underwriting is an oxymoron. insurance companies are structured into different

departments. they have an underwriting department and a claims department. and the underwriting department is supposed to do pre-issuance risk assessment to determine whether an individual policy is worth the company investing in that person. as a health care risk. the claims department is designed to respond to requests for coverage after a policy has been issued. so the very theory we're here to talk about today isn't even supposed to exist in a rational health care delivery system. and it wouldn't exist if we had a rational health care delivery system. but when you read news stories where the ceo of one private health insurance company is sitting on stock options valued at $1.6 billion, it shouldn't come as a shock to any of us that we're sitting here today hearing these horror stories of

patients who have been caught up in an inefficient, unsustainable private health insurance delivery system. and ms. raddatz, i wish every claims examiner at every insurance company and every underwriter who gets engaged in post-claims underwriting determinations had to go through what you went through, and the other witnesses who are here today. because one of the most profound experiences i've had in my life was spending about a month at a pediatric oncology unit at the university of iowa hospitals and clinics when i was in the big brothers big sisters program and my little brother was diagnosed with acute large cell nonhodgkins lymphoma, and spent time every day watching young patients with no hair, with i.v.s in their arms or in their chest going into a port, walking around and taking care of each other much better than our

health care industry takes care of patients in their time of need. and it's a slander on the names of the health care professionals who do everything they can to keep patients like your brother, like my little brother, alive when we don't give them the support that they need after they have invested their hard-earned dollars by paying premiums to a health care insurance company who turns their back on the patient in their hour of need. and that's why i'm a strong supporter of the public health insurance option. and i'm proud that my colleagues on this committee, chris murphy and peter welsh, have joined me in introducing the choices bill to give health insurance patients a public health insurance option with no discrimination so we don't have to go through these nightmares anymore. with that, i yield back. >> thank you. that concludes the opening statements of all members. one of our witnesses had to step out just for a moment. let's stand in recess

the hearing will come back to order. as i stated before we had the brief recess, that concludes the opening statements by members of the subcommittee. i would like to call upon our first panel of witnesses. our first panel we have robin beaton, who is a policyholder from walkahatchee, texas. miss peggy raddatz from illinois. and miss wittney horton from los angeles, california. welcome all of you. thank you for coming.

it's the policy of the subcommittee to take all testimony under oath. please be advised that you have a right under the rules of the house to be advised by counsel during your testimony. do you wish to be represent the by counsel during your testimony? you're all shaking your heads no? so -- okay. i'm going to ask you to please rise and raise your right hand to take the oath. miss beaton, if you want to sit there, that's okay. do you swear or affirm the testimony you're about to give will be the truth, the whole truth and nothing but the truth in the matter pending before this committee? let the record reflect the witnesses replied in the affirmative. they are now under oath. we will hear a five-minute opening statement from each of you. miss beaton, would you like to start first with an opening? you'd like to be last? miss horton, would you mind being first?

would you pull that mike forward and turn on the green button there. it doesn't pick up as well as it should. >> can you hear me now? >> we can hear you. thank you. >> good morning, ladies and gentlemen. i want to start by thanking the committee for this opportunity to testify this morning. i am very pleased that congress has decided to take a close look at recision, so that it can understand just how damaging this practice has been to so many people across the country. when blue cross canceled my coverage, i had no idea what recision meant. but now after my life has been turned upside down for the past four years, i've come to understand what a despicable practice it is. insurance companies require you to fill out an application that is deliberately confusing. and they don't do anything to make sure you understood the questions, or that you supplied all the information they need to decide whether they want to insure you or not. they just accept you, and accept your premium checks. it's after you see a doctor that everything changes. when your doctors file claims, the insurance company starts looking for reasons not to pay them.

they dig through your medical records and compare what they find to be information you put down on the application. it's called post-claims underwriting. and in california where i live, it's illegal. but insurers ignore the law and when they find a discrepancy or omission, they rescind the policy and refuse to pay any of your medical bills. even for routine treatment or treatment they previously authorized. blue cross's decision to rescind my insurance was devastating to my husband and me. and i consider myself one of the lucky ones. devestating to my husband and me and i consider myself lucky. as the lead plaintiff in a class-action lawsuit against blue kraut i represent 6,000 californians who were stripped of their insurance by blue cross. you can't imagine how horrifying some of those stories are. blue cross rescinded some of these people after they had undergone open-heart surgery or were receiving chemotherapy for cancer. some of these people were left with hundreds of thousands of dollars. we were all left to fend for

ourselves after blue crosswalked away from its promise to provide health @@)g@ r i worked in the film industry in los angeles, california where employment is generally temporary and done a free-lance basis. individual coverage is a necessity. at the time i apply for coverage, i just left a temporary staffing agency for sony pictures to work on a specific movie. when i made the move, i had to give up the stability of my group health care plan. a son of individual health care coverage. when i applied for coverage with blue cross, i wanted to make sure that i did everything correctly to ensure there would be no problems. a buildup the application to the best of my ability even though it was confusing. i wrote down everything i could remember about my health

history. i turned my application in to the insurance broker. she told me everything looked good in it was accepted by blue cross. i was only 27 at the time. went to my en endokron meteorologist and i got a letter back saying they wanted all of my medical records from my gynecologist. i consented. a couple months later in june of '05 i got a letter from blau cause saying that they were rescinding my policy because i didn't mention a certain medication i was taking. my doctor had prescribed this hoping it might help me lose without but it did not 'i stopped taking medication when i saw it did not work for me. in its rescission letter they

said they said they would never have accept med if they had known that i had polycystic ovaries. i later learned tt it is a diagnosis of exclusion and very difficult to prove. doctors often proceed on suspicions of a person having it without actually having proven it. this is what happened in my case, my doctor suspected i might have this. wrote it down and told me she was previbing this for weight management. i never knew what she wrote down in her notes because she never told me. after i was rescinded two doctors wrote letters telling them this but they didn't care the they just wrote back and said they were upholding their decision to rescind. after this, i showed my application to my sister and her husband, both radiologists.

and they said this tripped people up. i'm a college graduate, no dummy and i still couldn't make sense of blue cross's tricky application. the worst part is i've been unable to get insurance anywhere else. i applied for individual insurance through blue shield but on the application they ask if the applicant had ever had insurance rescinded when they learned i had they informed me they would not accept me. every insurance company asked if you've had health care rescinded. for the rest of my life i can't get individual coverage because of blue cross. as someone that works on in this industry this say big deal. i've had to take jobs i don't want and put my career goals on hold to insure i can find health insurance. 56 my husband and i got married i was able to get coverage through his company's group health care plan. if he ever loses his job or i don't have employment with a company that offers group health

insurance i might have to go without. as i mentioned before i consider myself one of the lucky ones. i don't have large outstanding medical bills and i'm relatively healthy. i was able to pay my doctors back for the amounts blue cross refused to pay. many people rescinded are far less fortunate and as the lead plaintiff against blue cross i feel an obligation to speak for them as well. what blue cross did was wrong and they must not be permitted to get away with it. americans desperately need health care reform. as my experience shows, owning an insurance policy doesn't mean access to health care. if insurance companies are not prohibited from doing this, the policies are not worth the paper they are printed on. insurance companies are making record profits in collecting premiums in exchange for the prom promise that they will be there for people when they need them. make them keep that promise. thank you.

>> thank you. thank you for being here. would you like to give you opening statement? >> thank you very much, mr. chairman and to all the members of committee for all your kind words and your wonderful statements. my name is peggy redittz and i'm testifying on behalf of my brother. my brother was a business owner of a restaurant that he ran with his wife, marie. he purchased a health insurance policy from fortus insurance company in august of 2003. on the application, he indicated he had kidney stones and smoked. he listed all physicians who had treated him. it will health application was accepted and is h his coverage began in august of 2003. a year later, my brother found himself inexplainbly losing a

large amount of weight. his wife, marie, urged him to see a doctor. in september of 2004, my 59-year-old brother at the time was diagnosed with stage four n n nonhodgkin's lymphoma. he started treatment. due to the aggressive cancer he had, he was given six more rounds of chemo by january of 2005. he suffered a lot during the period of time and was often unable to work. he was referred to a specialist in stem cell transplantation and for high dose chemotherapy.

he began this for purposes of preparing him for stem cell implant. these treatments were long and difficult in nature. in the middle of the chemo treatments he received a phone call and letter from the insurance company stating his insurance was cancelled. it was rescinded all the way back to the effective date of august 7, 2004, which was before his diagnosis for cancer. this meant none of his cancer treatments would be covered at all. most importantly, he would not be able to receive the stem cell transplant needed to save his life. my brother only had a very small window of time in which to have the stem cell transplant. he needed to be scheduled within the next three to four weeks or

he wouldn't be able to have the transplant at all and his life would be ended very shortly. my brother was told he was cancelled during what they called a routine review, during which they claimed to discover a material failure to disclose as they stateded in their letter. apparently, in 2000 his treating doctor had done a ct season which showed a small aneurysm and some insignificant gallstones. my brother was never told of either one of these conditions nor was he ever treated for them nor did he ever report any symptoms for them either. after months of preparation, the stem cell transplant could not be scheduleded. my brother's hope for being a

cancer survivor was dashed. his prognosis was only a matter of months without the procedure. by this time, he could no longer work and ultimately, had to sell his restaurant because of this. [ buzzing in background ] >> wait a minute, please. [ continued buzzing ] >> okay. when i called the hospital to see if i could schedule the stem cell tranls plant for him because he was in such a weakened state both physically and emotionally, i was callously told, unless your brother brings in cash and a bundle of it, he's not going to get the procedure without insurance. my brother was accused by fortis

insurance company of falsely stating his health insurance history, despite the fact that he had no knowledge of ever having gallstones or aneurysms. luckily, i'm an attorney and i was able to aggressively become involved in solving this life-threatening situation. i got on the phone and literally made dozens of phone calls day after day after day, i put my personal work aside and worked on this literally round-the-clock, calling people. i finally was told to contact the attorney general's office and received immediate and daily assistance from the illinois attorney general's office and from the dr. walledman, the medical director of their health bureau. i can't thank them enough for their daily assistance and support of myself and my brother through this difficult time.

during their investigation, they located the doctor who ordered the ct scan. he was not only retired, he was on a fishing trip at the time. and through their unbelievable resol resolve, they were able to get ahold of him -- he recalled my brother and his treatment of my brother but had no recollection of ever disclosing the information to my brother or treating him for gallstones or for a small aneurysm. after two appeals by the illinois attorney general's office, the insurance company finally overturned their original decision to rescind my brother's coverage and he was reinstated without lapse. this is after weeks of constant phone calls between myself and the attorney general's office and we were literally scrambling

hour by hour to get this accomplished so that my brother wouldn't lose his three to four week window of opportunity that he had prepared for and lose his opportunity to have the procedure. what the fortis insurance company did was unethical. to deny a dying person necessary medical treatment based upon medical conditions a patient never had knowledge of, never complained about or never been treated for, is cruel. it is the help of our family that this information will benefit other patients who are in need of life-saving medical treatments and who do not have the knowledge or means necessary to fight against the health insurance companies. it is further our desire to expose these practices of fortis insurance company so others do

not have to suffer as victims as my brother did. thank you very much, mr. chairman and thank you, so much members of the committee for all your effort into thank you. >> mrs. baiten. i'm rob been baiten i'm 59 years old and i was a registered nurse for 30 years. i had insurance and i was in good health. i retired from nursing and started my own small business. obtained a personal individual policy from blue cross and blue shield in december of 2007. in may of 2008, i went to a dermatologist for acne, pimples and a word was written on my chart which was considered to

mean precancerious. in june i was diagnosed with a aggressive form of breast cancer. i needed a double mastectomy immediately. and blue cross and blue shield precertified me for the surgery and for a hospital stay. the friday before i was to have my double mastectomy, blue cross and blue shield called me by telephone and told me that my chart what does that mean? they said that due to the dermatologist report, that is what red flag my chart in the beginning and i would not be able to have my surgery on monday. they launched a five-year medical investigation into my medical history. i had to give them