Rescission

Rescission is when an insurance company retroactively cancels your health coverage, as if you were never insured at all. It's different from a simple cancellation because it goes backward: the insurer voids your policy from a past date, potentially leaving you responsible for medical bills you thought were covered.

Under the ACA, rescission is heavily restricted. Your insurance company can only rescind your coverage for two reasons: fraud, or intentional misrepresentation of a material fact on your application. For example, if you deliberately lied about a serious medical condition to get lower premiums, your insurer could void the policy.

Your insurer cannot rescind your coverage for honest mistakes, unintentional omissions, or because you got sick and started costing more money. Before the ACA, some insurers would dig through applications looking for minor errors as an excuse to cancel coverage when someone filed expensive claims. That practice is now illegal.

If an insurer decides to rescind your policy, they must give you at least 30 days' written notice before the rescission takes effect. This gives you time to challenge the decision. You have the right to appeal a rescission through your insurer's internal appeals process and, if necessary, through an external review.

Rescission is serious; it can mean losing coverage and being billed for care you've already received. If you receive a rescission notice and believe it's unjustified, contact your state's insurance department or call us immediately for help.