Everyone who files for independent health insurance is required to fill out an application that lists all pre-existing medical conditions. But what if you fail to mention the fact that you have acne? Or a slightly enlarged blood vessel (which is so non-life-threatening that your doctor doesn’t even mention it to you after a cat scan)?

Failure to mention these small, and seemingly unimportant, medical issues allows health insurers to rescind a policy — especially when a person needs it most.

A new report by congressional investigators states that the practice of policy rescission is common among insurers and saves them millions of dollars a year.

An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

Two cases highlighted at the hearing were that of Robin Beaton and Otto Raddatz. Beaton’s policy was reportedly rescinded a few days before her scheduled mastectomy because she failed to mention she had once visited a dermatologist because of acne. Raddatz’s policy was reportedly dropped when a pre-existing medical condition he was not aware of surfaced after he was diagnosed with lymphoma.

Rep. Bart Stupak (D-MI) was among the lawmakers who grilled health insurance company executives at a congressional hearing last week.

Late in the hearing, Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show “intentional fraud.”

Each answered “No.”

The outcome of the meeting put the option of a public health insurance plan in a very favorable light.

Proponents of a public plan seized upon the hearing, saying it showed why access to health care cannot be left to private insurance companies.

We will soon see whether a government-run, public health-care plan will serve the uninsured…and hopefully create a more fair world amongst the private insurers.