One in 10 Americans with cancer say they cannot get health insurance, and 6% report losing their coverage because of their diagnosis, the government has said.

A recent national survey also found that 12.6 million non-elderly adults – 36% of those who tried to buy insurance on the private market - were discriminated against in the past three years because an insurance company deemed them ineligible for coverage due to a pre-existing condition, charged them a higher premium or refused to cover their condition, the Department of Health and Human Services reported this week.

A new study launched by the Department on Tuesday reports that the insurance company practice of denying coverage to or discriminating against people with pre-existing medical conditions is allowed in 45 US states and is not confined to serious diseases; even minor problems such as hay fever could trigger prohibitive responses. An insurer could charge high premiums, deny coverage or set a restriction such as denying any respiratory disease coverage to someone with hay fever, it says.

Moreover, some insurers respond to an expensive condition such as cancer by initiating a thorough review of the patient’s health insurance application. If it discovers that any medical condition - no matter how minor - was not reported on the application, it could revoke coverage retroactively for the patient and possibly all members of the patient’s family, says the report.

The practice, known as rescission, can be employed even if the condition found is not related to the expensive condition or if the person was unaware of the condition at the time, says the HHS, which adds that at least one insurer has encouraged employees to revoke sick people’s health coverage through rescissions.

High-risk pools - but benefits not guaranteed
So what is to be done? The report notes that 35 US states offer a high-risk pool for people who have been denied coverage in the individual insurance market or otherwise cannot obtain insurance. However, these pools generally charge significantly higher rates than for a healthy person in the individual insurance market, meaning that only relatively high-income people can afford the coverage. One study estimates that only 8% of the uninsurable population is able to enroll in high-risk pools, mainly because of high premiums, it says.

Moreover, benefits through state high-risk pools are not guaranteed. Some have annual caps on enrollment or limit eligibility only to people who had prior group health coverage in the preceding 63 days, while one pool has been closed to new beneficiaries since 1991. Also, all high-risk pools impose pre-existing condition exclusions for six months to one year, during which time care for the very condition that made someone uninsurable is not covered, it adds.

"No one holds these companies accountable," said President Barack Obama, discussing the report’s findings in New Hampshire. Under his Administration’s health reform plans, insurance companies would no longer be able to refuse coverage based on medical history or health risk, nor could they water down coverage or refuse renewal because a person becomes ill. They would aso have to renew any policy as long as the policyholder pays the premium in full, say officials.

The Department is also releasing a series of new state-by-state reports which show, says HHS Secretary Kathleen Sebelius, how “every American will benefit when we pass health insurance reform.”

America’s Health Insurance Plans (AHIP), the national association representing health insurers, responded to the HHS' findings by pointing out that its members have already proposed reforms to make sure that no one is denied coverage because of a pre-existing condition. “Our proposal includes new consumer protections and market rules to guarantee coverage for pre-existing conditions, discontinue basing premiums on a person’s health status or gender, and get everyone covered through a personal coverage requirement,” said AHIP chief executive Karen Ignani.