When Health Insurance Isn't Health Insurance
In May, 2008, Robin Beaton, a retired registered nurse from Waxahachie, Texas, went to her dermatologist to be treated for acne. He mistakenly wrote down something on her chart that made it appear that she might have a pre-cancerous skin condition.
Not a big deal, right? It shouldn't have been, except that soon after that, she was diagnosed with something far more serious--invasive and agressive breast cancer. Three days before she was scheduled for a double mastectomy, her insurance company, Blue Cross, called her and told her they were launching an investigation into the last five years of her health records. It turned out that dermatologist's note had been a red flag, and the company was looking for a way to cancel her policy on the grounds that she had been hiding a serious medical condition.
What Robin went through after that was a nightmare, one she tearfully described Tuesday morning in front of the House Energy and Commerce Committee's oversight and investigations subcommittee. "The sad thing is, Blue Cross gladly took my high premiums, and the first time I filed a claim and was suspected of having cancer, they searched high and low for a reason to cancel me," said Robin, whose hair is just beginning to grow back in from chemotherapy.
The subcommittee took a look today at an immoral--and illegal--practice in which some health insurance companies engage. It's called post-claims underwriting, and you should know about it. Because you or someone you love could be a victim if they buy insurance on the individual insurance market. Robin got her mastectomy, but only after her congressman, Joe Barton, leaned on the head of the company. (This is constituent service, in the very best sense of why we elect these guys. But the best thing they could do is to make sure it doesn't happen to anyone's constituent.)
There were other witnesses, too. Like Peggy Raddatz, whose brother Otto Raddatz lost his insurance coverage right before he was scheduled to receive an expensive stem-cell transplant to treat his lymphoma. Why? Because Fortis Insurance Company discovered that his doctor had found gall stones and an aneurysm on a CT scan--conditions that had nothing to do with his cancer, and that never bothered him, and that he wasn't even aware of. And Jennifer Wittney Horton of Los Angeles, whose coverage was canceled because she had been taking a drug for irregular menstruation. Now, she can't get coverage anywhere else. "Since my recission, I have had to take jobs that I do not want, and put my career goals on hold to ensure that I can find health insurance," she told the subcommittee. "Fortunately, after my husband and I got married, I was able to gain coverage through his company's group health care plan. However, 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 insurance."
The insurance companies will argue that cases like these are rare, and that they have to be vigilant against fraud so that they can hold down costs for everyone else. But an investigation by the subcommittee found widespread instances where the insurance companies rescind coverage even over discrepancies that are unintentional, unknown to the policyholder or immaterial to the more serious health conditions for which the policyholders are filing for benefits. The three insurance companies called before the committee--Assurant (full disclosure: this company's was part of a cover story I wrote for TIME about my brother), Golden Rule (a UnitedHealth subsidiary), and WellPoint--were a case in point. "The three insurance companies downplay the significance of these practices, arguing that recissions are relatively rare," says Energy and Commerce Committee Chairman Henry Waxman. "But these three companies saved more than $300 million over the past five years as a result of rescissions. I am sure they view this amount as significant." You can find a summary of the subcommittee report here.
Lisa Girion of my former employer, the Los Angeles Times, has done terrific work on this issue. Here's what she reported today:
Blue Cross of California encouraged employees through performance evaluations to cancel the health insurance policies of individuals with expensive illnesses, Rep. Bart Stupak (D-Mich.) charged at the start of a congressional hearing today on the controversial practice known as rescission.
The state's largest for-profit health insurer told The Times 18 months ago that it did not tie employee performance evaluations to rescission activity. And executives with Blue Cross parent company WellPoint Inc. reiterated that position today.
But documents obtained by the House Committee on Energy and Commerce and released today show that the company's employee performance evaluation program did include a review of rescission activity.
The documents show, for instance, that one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.
WellPoint's Blue Cross of California subsidiary and two other insurers saved more than $300 million in medical claims by canceling more than 20,000 sick policyholders over a five-year period, the House committee said.
"When times are good, the insurance company is happy to sign you up and take your money in the form of premiums," Stupak said. "But when times are bad, and you are afflicted with cancer or some other life-threatening disease, it is supposed to honor its commitments and stand by you in your time of need.
"Instead, some insurance companies use a technicality to justify breaking its promise, at a time when most patients are too weak to fight back," he said.
Lawmakers -- Republicans and Democrats alike -- decried the practice of canceling policies of ill policyholders and grilled insurance executives about it.
The hearing began a day after President Obama outlined his proposals for revamping the nation's healthcare system. But any such overhaul would be incomplete without an end to rescission, said Rep. Henry Waxman (D-Calif.).
"It's shocking. It's inexcusable. It's a system we have in place that we have to stop," Waxman said.
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1
But...We don't want the government deciding these things.
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2
A friend of mine was jogging and stepped off the curb and sprained her ankle. She went to the ER 'cuz she thought it was broken and thought nothing of it, filing it with her insurance.
About a month later, she got a form that she was denied, so she called and they said that they didn't cover domestic violence injuries, and since she had said to the ER doc that her boyfriend pushed her off the porch they wouldn't pay.
Of course it was all b.s.; she tried to track down the ER people to figure out what the heck was going on. After spending something like 20 hours getting the run around from the ER and especially the insurance company, she finally just paid the $170 bucks or whatever she owed. -
3
Again, it's just the free market grinding to its inevitable 'efficient' conclusion.
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Why are we surprised? -
4
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We've got the best Senate money can buy.
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Envy of the free world, peeps!
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5
Of course, if it was "faceless bureaucrats" deciding your health care choices, the outcomes would be worse in non-specific ways that include lots of repetition of the words "choice" "rationing" and "competition".
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6
Obviously, these cases are problematic, and contracts need to be enforced. But isn't the reality that most people are satisfied with their health coverage? What do the docs say? "First do no harm."
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Let's look at something the government does control--the criminal justice system. How many people have been killed, raped or brutalized by criminals who committed serious violent crimes, got a light sentence or early parole and went to predate again? I don't see any hand-wringing about that--but on anecdotal evidence we're going to hand over a fifth of our economy to a White House that fires Inspectors General because they do their jobs. -
7
spob,
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Here's a guess. The vast majority of those who experienced rescission were "satisfied with their health coverage" before they got screwed by their insurance company.
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The private care system we have now is awful, and has been awful for a long time now. People not realizing that and thinking they're satisfied with a product they've never used isn't an excuse to ignore the problem. -
8
The people that are satisfied are like Robin Beaton, who had insurance when they were healthy, and once they weren't, the death for profit industry would do absolutely anything and everything to destroy their lives over an executive bonus here, or a payment to a mistress there.
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9
Here's something else the federal government controls and that everyone across the political spectrum agrees should be managed by the government: national security. And I would argue that ensuring our nation has an effective health care system falls under that broad heading. I am not suggesting that the Pentagon take over our health care. I am suggesting that we need to see affordable, accessible health care for all of our citizens as a national security issue. Because what we have right now is horrible and contributes to ballooning debt, loss of productivity in terms of work hours missed, and generally poor health care. Unless you have lots of money, in which case it doesn't matter, at least to you. Not immediately.
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Protecting its citizens from poor health, and ensuring that its citizens get preventative health care to avoid future health care issues with all their attendant costs, seems to be something our government should work to provide.
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You know what else the docs say? They seem to want a universal health care system, despite what the AMA might think. -
10
executive bonus here, or a payment to a mistress there
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There's no need to demonize business people here. As I've tried to point out several times, what they're doing is absolutely rational and therefore reasonable. The problem is that the 'market forces' that everyone seems to think have magical powers to do everything best without government involvement are absolutely incapable of assigning a 'proper value' to human life and health.
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The fact that certain segments of our society still insist that they can, points to incredible callousness and willful ignorance.
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OK, I giuess there's some old fashioned greed involved as well after all.
Cancel what I said about not demonizing the Insurance execs..... -
11
When's the last time a member of congress had their coverage rescinded while in the midst of an illness? Answer is simple folks, mandate that all health insurance offer coverage as good as available to members of congress, at no greater price as a percentage of salary.
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12
The Republicans have spent thirty years trying to assure that government doesn't work – imposing ludicrous ideological restraints, shorting agency budgets, appointing incompetent leadership and sowing cynical public mistrust 24/7. That doesn't mean government can't work, anymore than we should assume the military – a government operation – can't fight.
KT, your post answers the question you posted earlier: "Does health reform require [a public plan]?" Only if we want it to work.
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13
[...] the rest here: When Health Insurance Isn’t Health Insurance (Time Magazine) var addthis_pub="khoapham"; // Tags: commerce, companies-engage, Health, look-today, [...]
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14
[...] and against public vs private options. Anyone actively engaged in this discussion should read this: When Health Insurance Isn’t Health Insurance – Swampland – TIME.com. Even if you strongly believe that the private way is the best way to go — I don’t [...]
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15
It's really odd that the Congress people who criticize public health care for the reason that government management would be so terrible work in the very system they're so paranoid about. If they hate it so much, maybe they should get the hell out. The bottom line is, out health care system is broken and needs to be fixed. It doesn't matter that Obama's proposal isn't perfect; it's a start. The naysayers should stop their grousing and chip in to find a solution. That's the real American way.
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16
There is no need to bloat the federal government on this. What is needed is serious, thoughtful, well-researched reform with new regulations and vigorous oversight of insurance companies and caps on premiums and other rates. Perhaps a government Bureau of Health Service Oversight, whereby people could report claims of rescission and other unethical actions that violate clearly established Legislative guidelines on the matter. I think it is imprudent to hand complete control over to government when definitive regulations and enforcement would work in its stead. Whenever possible, smaller government!
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One major problem with this proposal, however, is that when dealing with life and death issues the average claimant cannot afford to wait for government bureaucracy to address their claims; therefor the agency tasked with enforcement and oversight would need a broad and authoritative mandate enabling it to move swiftly and directly against any offending insurance company.
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I think a proposal along these lines makes more sense than a government run health option, at least according to my libertarian leanings on matters of government scope... -
17
neoration,
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Your comment is just all kinds of awesome. It only took you one sentence ONE SENTENCE to go from "There is no need to bloat the federal government on this" to "Perhaps a government Bureau of Health Service Oversight..."
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That's just too awesome man. Are you in physical pain from that much cognitive dissonance? -
18
So I take it you'd rather nit-pick than comment on the substance of my comment? Post #15 suggests that the "naysayers" chip in to find a solution. I did so, in a manner that I feel would reduce the role of government from the single-payer system, no matter how close those two sentences were to one another, and this is response? Ridicule? You people wonder why no one wants to cooperate or work with you on anything...
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19
The only ridiculous thing here is the idea that private, free-market companies who have every economic incentive to deny health coverage is capable of working in the interests of their customer base. A customer base, I might add, that can generally drop the insurance company on a dime either intentionally or accidentally (getting fired, etc).
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20
There is no need to bloat the federal government on this. What is needed is serious, thoughtful, well-researched reform with new regulations and vigorous oversight of insurance companies and caps on premiums and other rates. Perhaps a government Bureau of Health Service Oversight, whereby people could report claims of rescission and other unethical actions that violate clearly established Legislative guidelines on the matter. I think it is imprudent to hand complete control over to government when definitive regulations and enforcement would work in its stead. Whenever possible, smaller government!
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The closest system you're sort of describing here is what is done in Switzerland. They are technically private companies but very heavily regulated and controlled. I have to agree about the cognitive dissonance though, you argue for less government interference then turn around and propose a new government regulatory agency with a broad mandate. This is really not a case where you can have your cake and eat it too. Government-run single payer systems are employed with varying rates of success all over the world (I'm partial to the Australian system myself, the public/private split there seems to be very effective), if we're going to create another layer of bureaucracy we might as well go all in and guarantee health care for everyone. -
21
I can't find myself caring for these people, and it's not because I don't have a heart. It's because so many of these people who have insurance never start to care about the deplorable conditions that so many Americans have to live with who can't afford any health insurance. They don't care right up til they too find themselves in that category.
They might be nice people, but nice just don't cut it. Most people who have insurance live in blissful denial about the rest of those who don't. Only now that they're faced with that darkened reality do they shed a few crocodile tears and say they never knew how bad it was. We should be saying too late, you never cared before, why should we suddenly start caring for you now.
Am I cynical? Am I suffer from apathy? AT the moment I'm writing this I guess I do. And maybe tomorrow when I read my words with the fresh perspective of a good nights rest I'll feel less inclined to be write this way. But I won't stand by anymore and weep, or lie and say I do, for people who never cared before that the system was rotten until it came crashing down around them.
And I'm not referring to the people in this TIME's article. I'm referring to a lot of the people I know, both educated and non, higher social class and lower. Those people who have the luxury of having good coverage through their jobs or family members. And I'll tell you, a lot of them just don't give a thought to the people not so fortunateas them. It's a "glad I'm not them attitude and pass the heart clogging-greasy-fat McDicks hamburger down cause I got health insurance and a free ticket to ride."
If anything, the focus should be on fixing the system overall, not on fixing the cracks that appear in the walls. We need to rebuild the foundation on which it dwells. If we can't do that, then stories like this will be replaced each week by another tale not unlike the last, til it too is soon forgotten as well.
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22
You're article on Robin Beaton struck close to home. I listened briefly to Ms. Beaton on TV. I knew she had faced a really tough time.
And that she was not the only one who'd been made to suffer by the insurance industry.
My former business partner has cancer. Rather a tumor. It weights well over a 100 pounds now. She has been rated as “terminal” for some time now.
A few years ago, she received notice from her life insurance company that they were dropping her. The reason was that she was late with her payments. Seems that the insurance company sent her a payment book. The date on the payment stubs was later then that listed on the policy. She used the payment stubs.
But she had one thing on her side: me. I had been in the insurance business dealing in the senior market, life and health. I knew that the law in Texas stated that you had some many days to pay your premium before you were dropped.
I knew the insurance company was in violation of the law. It was the only life insurance she had. No one, and I mean no one was going to offer her any coverage because of her health condition. The only way to get coverage was to have the insurance company reinstate her.
I told her to file a complaint with the Texas Insurance Commission. She did. It took almost a year for her to have her coverage reinstated.
But she got reinstated.
Later I found out that her insurance company was facing financial hard times when they dropped her.
My only thought was just how many others were in the same situation as her. Sadly I knew that these victims of the insurance company didn't know they had any recourse.And sadly, you never ever hear about the FRIVOLOUS LAWSUITS filed every day by the insurance industry. It seems that so called "Tort Reform" is only to protect those who have billions. Not the victims.
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23
Test...
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24
Am I the only one who saw rumor of this? Perhaps conspiracy theorizing, but spooky nevertheless:
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http://www.truthdig.com/report/item/20090614_the_american_empire_is_bankrupt -
25
Just a reminder, something I maybe wasn\'t clear enough about in the post: This practice is ALREADY ILLEGAL. And yet the insurance companies continue to do it, and--as the LA Time story showed--continue to REWARD their employees for doing it. If those three companies in the congressional study saved $300 million doing this, they are doing way more than rooting out fraud.
- ktumulty New Blog Entry, "Anthem Blue Cross Makes The Case For Health Reform" - http://tinyurl.com/yab3hjs - 49 minutes ago
- ktumulty New Blog Entry, "For That Very Special Someone on Valentine's Day" - http://tinyurl.com/yg5qd4o - 3 hours ago
- ktumulty New Blog Entry, "Welcome to Swampland, Adam Sorensen!" - http://tinyurl.com/yadyarr - 12 hours ago
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