Thursday, June 18, 2009

Private Health Insurance Companies Insist on the Right to Cancel Your Insurance Policy if You Get Sick:

It's Called Rescission of Coverage...

When a private, for-profit health insurance company denies you coverage simply because you presented them with a big bill or a diagnosis which predicts big bills in the future, they have rescinded, or canceled your policy.

Executives from the 3 largest health insurers Tuesday, June 16th, told federal lawmakers that they would continue to cancel medical coverage for sick policy holders. Both Republicans and Democrats criticized the practice, but the insurers held firm.

This practice has left thousands of Americans without medical insurance at a time when they were facing costly medical bills.

Can anyone explain to me why this is less interesting news today than Senator Boxer's request to be called Senator rather than "Maam"?

WellPoint, Inc, United Health Group and Assurant canceled the coverage of more than 20,000 people, and saved their company more than $300 million in medical claims over a 5 year period. They targeted anyone with a diagnosis of breast cancer, lyphoma, high blood pressure and more than 1,000 other conditions.

Employees terminating these policies were praised in performance reviews. Neither Richard Collins of United Health's Golden Rule Insurance Co., nor Don Hamm, of Assurant Health, nor Brian Sassi of Well Point would commit to limiting rescissions only to fraudulent applications.

Even Republican Representative Michael C. Burgess from Texas said, "No one can defend... the practice of canceling coverage after the fact...."

The insurance executives held that they had the right to use rescission when "insurers ignore the law." Yet, lawmakers had been listening to testimony by many people from around the country who were dropped as soon as it was clear they were going to reduce the company profits -- ie, as soon as they had an illness that would need treatment.

The Los Angeles Times reported these stories:

One nurse from Texas said she lost her coverage after she was diagnosed with an aggressive form of breast cancer. -- Her mistake was that she had failed to disclose a single visit to a dermatologist for acne. Additionally, it was found that she had listed her weight incorrectly. She had to cancel her scheduled mastectomy because the hospital wanted a $30,000 deposit. By the time her Representative, Joe Barton, had talked with the president of the insurance company and gotten her coverage reinstated, her tumor had grown from 3 centimeters to 7 centimeters and all the lymph nodes under her arm needed to be removed as well.

The sister of a man who died in Illinois of lymphoma, said his policy was rescinded for failure to report gallstones and a possible aneurysm that his physician had never disclosed to him, although he noted it on his chart.

At Mindbridge, we personally know a local business owner whose daughter died a few years after being born with severe birth defects. She needed a series of operations and after the first two, his health insurance policy was canceled. He was left with the bills. When he inquired about this, he was told that he had left off his application form a single visit to a doctor for "asthma" when he was 10 years old.

The insurance execs protest that they use rescission when they find "fraudulent applications" would be more believable if they found those mistakes or ommissions as often when the family members were all healthy and securely paying their premiums on time, as when the family is in need of health insurance because someone is very ill.

Another Republican from Texas, Representative Joe Barton, said, "...A company has a right to make sure there is no fraudulent information...but if a citizen acts in good faith, we should expect the insurance company that takes their money to act in good faith also."

When the committee chairman asked each executive if his company would commit to immediately stop rescissions except where they could show "intentional fraud" the answer from all three was, "NO."

Representative John Dingell of Michigan responded that this was exactly why we needed a public option for consumers.

CNN reports that when asked whether it bothered him that people were going to die because they insist on reviewing a policy when someone forgot to tell they they had been treated for acne, Hamm replied, "Yes sir, it does...."

This is the Problem with Private Insurance:

Any private company has the right to accept or reject any application for services. The health insurance companies do this based on tables of costs for services for particular diagnoses. This is how they estimate their costs and profits. We can accept that this is a necessary part of doing business. (- And this is a problem we will discuss shortly.)

However, when a person in good faith buys insurance, and they are accepted, they have every right to expect that the "insurance" company is actually going to be there when they need the insurance. Isn't this what insurance means?

If not, then they should call themselves something else, like, "Money Collecting Companies" or "Good Health Companies" so that you would have a clue that they are only going to be there for you when you and your family are "in good health."

But, the other problem is the exclusion that private, for profit insurance companies exercise for pre-existing conditions. This can be used to rescind your policy if you smoked a single cigarette when you were 18 years old, and later develop lung cancer.

This has the effect of keeping a person a slave to whatever company has been paying for their insurance once they develop "a condition." If you happen to lose your job, or worse, if you weren't working at the time that the condition was discovered, you will never qualify for insurance anywhere else. Or, if your employer decides to change carrier companies, all the employees who have been receiving treatment for "conditions" will be ineligible for fairly priced insurance. This can throw you in to the "high risk" pool which is far more expensive.

Without a public option that accepts everyone, these people will either go without medical help, or continue to mortgage homes to pay for needed medical treatment and, too often, end up losing their homes. Until the recent mortgage crisis, this was the most common reason for bankruptcy.

NBC tried to help with explaining the ins and outs of health insurance, but if you listen carefully she suggests asking questions before you sign up, and meeting with your doctor beforehand to go over your medical records. If your employer is offering only one health insurance company, you might just be out of luck.

We at Mindbridge submit that it should not matter whether you smoked one cigarette when you were 18, or whether you were ever treated for acne, or whether you were ever treated for asthma. the pool of people in the United States is so large, that there will always be more than enough healthy people putting money into the system that they aren't using, that we will cover the costs of those who are not so lucky and actually need financial help for their medical bills.

This is why we need a public, single payer, option, and this is why people need to be able to, and ought to switch from their current private, for profit, health insurance companies to the public option without penalty. It will not be cost effective if all the healthy people stay with private insurance companies, and the unhealthy people all end up in the public system.

Lawmakers' Ties to Health Care Industry:

Children with Autism Denied Insurance:

The Complete Story on Single Payer Health Insurance from Bill Moyers:

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