INDIANAPOLIS (Reuters)—WellPoint Inc. said that as of May 1 it would expedite health care reforms and stop dropping health care coverage for customers after they get sick, responding to pressure from Democrats in Congress and the Obama administration.

The health insurer announced its decision Tuesday after Democrats from three U.S. House committees earlier in the day wrote to seven health insurance executives urging them to immediately stop the practice, known as rescission. A separate letter from 57 Democrats was directed at WellPoint alone.

Health care reform legislation passed last month makes rescission illegal except in cases involving fraud or intentional misrepresentation, allowing six months to comply. But Democrats pushed for action sooner following a Reuters report on April 22 that WellPoint used computer algorithms to target women with breast cancer for an investigation, with the intent of canceling their health care policies.

"There have been a lot of misrepresentations and inaccuracies in recent days that have caused confusion among our members and among the public generally about our policies in this area," WellPoint CEO Angela Braly said in a statement.

It will still rescind policies in fraudulent and other similar cases, company spokeswoman Kristin Binns told Reuters.

Democratic lawmakers called on WellPoint, UnitedHealth Group Inc., Humana Inc., Aetna Inc. and other insurers to immediately ban such actions except in cases of fraud or intentional misrepresentations, and to institute third-party reviews of any decision to drop coverage. The letter also went to the Blue Cross Blue Shield Assn., Kaiser Permanente and Assurant Health, part of Assurant Inc.

In the letter to WellPoint, House Democrats backed a call by Rep. Rosa DeLauro, D-Conn., urging the insurer "to end the deplorable practice of canceling health insurance coverage for patients diagnosed with breast cancer or any other illness."

WellPoint's decision "will benefit countless women in the future who will be diagnosed with this disease," Rep. DeLauro said in a statement later Tuesday.

WellPoint, the largest health plan in the Blue Cross Blue Shield Assn., has said its software looks for conditions patients may have had before seeking insurance coverage but that it does not single out breast cancer. It has called the Reuters report inaccurate, but Reuters has stood by its story.

The Reuters report also sparked a stern rebuke from U.S. Health Secretary Kathleen Sebelius, who last week urged WellPoint and others to step up compliance. After WellPoint's decision, Ms. Sebelius said she was encouraged and that companies should "not wait until September to do the right thing."

Several Democratic lawmakers also welcomed WellPoint's decision and urged other insurers to follow suit.

"Now it's up to the other insurance companies to show they're serious about making health reform work," said Rep. Pete Stark, D-Calif., chairman of the House Ways and Means Committee's health panel.

Under the health reform law, health insurers have until Sept. 23 to halt rescission and a number of other controversial practices such as denial of coverage for pre-existing conditions and lifetime caps on payments.

A number of insurers have already moved to implement one reform not due until September—extension of coverage for young people until age 26 on a parent's plan.

Humana CEO Mike McCallister told Reuters the insurer would comply fully with the law but that it needed to examine whether it could act on the lawmakers' request.

"We can't jump at every thing that they immediately request ... I don't know the implications of that," he said. "We're acting in good faith, and what we're looking for is someone who has not acted on good faith."

Assurant spokeswoman Shawn Kahle said that Assurant Health already has third-party reviews and that it would act as quickly as possible to end rescission.

Aetna said in an e-mailed statement that it began external reviews in 2008 to allow customers facing rescission to obtain a no-cost, third-party review.

Blue Cross and Blue Shield Assn. spokesman Brett Lieberman said in an e-mailed statement that the group was reviewing the committees' letter.

Representatives for other insurers either could not be reached or had no comment.

First-quarter profit

In other news, WellPoint posted a better-than-expected first-quarter profit on Wednesday, as the company spent less premium revenue on medical costs and reported improvement in its Medicaid plans for low-income Americans.

The largest U.S. health insurer by membership also slightly reduced its expectations for year-end enrollment.

WellPoint is the latest health insurer to report sharply better-than-expected profit this quarter, following UnitedHealth and Humana. But concern over implementation of the new health reform law has so far undercut investor enthusiasm for the companies' results.

"It's clearly a solid quarter," Collins Stewart analyst Brian Wright said. "We need some of these other issues to be resolved before we get a more sustained rally in the group."

WellPoint's net income was $876.8 million, or $1.96 per share, compared with $580.4 million, or $1.16 per share, a year earlier, when results were hurt by net investment losses.

Excluding items, earnings of $1.95 per share were 28 cents ahead of the consensus estimate of analysts, according to Thomson Reuters I/B/E/S.

Operating revenue slipped 3% to $14.87 billion.

WellPoint spent 81.8% of premium revenue on medical costs, down from 82.5% a year ago. While such medical cost ratio improvements have been hailed by investors in the past, they have been less warmly received this quarter because the new law will more tightly regulate such spending.

WellPoint reported 33.8 million members at the end of March, down 2.1% from a year ago. It projected year-end membership of about 33.1 million, after saying in March it expected 33.3 million at year's end.

Like its rivals, the Indianapolis-based company is grappling with the effects of the weak economy, including reduced membership as layoffs lead to fewer people with employer-based coverage.

Operating profit in the commercial segment, which includes plans serving employers, rose 8% to $978.4 million, as the company cited improvement in its local group business.

Profit rose 49% to $326 million in its consumer segment. WellPoint pointed to improvement in its state-sponsored business, which includes its Medicaid plans, due to operational changes, higher reimbursement levels for some programs and a less severe flu season.

WellPoint expects full-year net income of at least $6 per share. Analysts are looking for $6.14.