Thursday, July 17, 2008

L.A. city attorney sues over canceled policies

Let's just for a second turn our attention to this article in today's L.A. Times Business section. Click on the above title to read.

This is yet another case of a California health insurance company being sued for rescinding their members’ policies when those individuals become ill or needed an expensive medical procedure performed. However, we’re looking at Blue Shield, which is a nonprofit health insurance company. When I interviewed the former President of the National Association of Health Underwriters, Bruce Benton, he certainly told me the nonprofits do business the same way. I guess I was warned, but it still doesn’t make reading about a nonprofit participating in these same predatory rescission tactics any easier.

While this piece has many similarities with other articles that the media, specifically the L.A. Times, have published on this topic, there is something else about this story that stands out to me. This is the first lawsuit I’ve come across in where the health insurance application has been called into question. Los Angeles City Attorney Rocky Delgadillo’s lawsuit specifically accuses Blue Shield of making their applications intentionally confusing to increase the chances that applicants will make a mistake. This makes sense, then the insurance companies have something to call those people on if they ever “need” to. Hey, who doesn’t like to have leverage?

I’ve filled out those 22-page things multiple times in my debacle with Anthem Blue Cross. I think it’s perfectly understandable to see how a person could make a mistake, especially if English is their second language as in this L.A. Times case with the Simoes. Maybe it's just because Anthem’s turned me into a health insurance cynic, but I definitely find it plausible that Blue Shield intentionally made their applications mistake-prone. Sorry guys, that's your fault-- you’ve lost your benefit of the doubt with the state of California many times over.

Remember how Mr. Benton explained how the health insurance companies weren’t doing anything wrong? How those people with canceled policies all lied on their applications and they deserved to have their plans taken away? That the media unfairly singles them out for exercising understandable company policies? Well, I particularly like these Blue Shield quotes from the article:

  • · “This suit is a cheap political stunt that is totally without merit”
  • · “Blue Shield cancels policies rarely and that the practice is a legal and necessary tool to combat fraud….if there were no consequences for applicants who misrepresent significant medical conditions, insurance rates would skyrocket for the vast majority of Californians who complete their applications accurately.”

Where, oh where, have I heard this before?

Let’s just take a minute to give props to City Attorney Delgadillo for helping protect the millions of Californians like me dependent on Anthem Blue Cross, Blue Shield and Health Net for insurance. Private enterprises have made it clear these days that they cannot handle not being regulated, so now we must look to the courts to ensure that our rights are a priority now, and into the future. Good luck to all of us.

1 comment:

Ric Storms said...

I think the main problem with the health care industry in this country is just that, its an industry. Even for non-profits like Anthem Blue Cross, they still have to worry about a bottom line and answering to a board of directors who are responsible for their funding. As long as health care is framed as an industry, we should expect nothing less. An industry is a vehicle of capitalism and as such will act in its own best interest. I am not suggesting socialized health care would solve all the problems, more than likely it would create enough to make us forget about the ones that are resolved. The main duty of law makers is to see beyond the industry side of the equation, and into the human rights side of things. While the health care industry exists in a capitalist framework, it is a broken one. An ideal system would be perfectly competitive, with many providers optimizing both services and price to try and persuade people to use their services. Unfortunately the situation is almost as imperfectly competitive as possible. We have people begging for health care, taking inferior and insufficient service for vastly inflated costs. This situation will perpetuate itself if left untouched, as their is no economic impetus for change on the corporate level. As an industry they are thriving, there is no lack of demand for their services as offered, so why improve them. The situation of a new player entering the industry is extremely unlikely due to the high cost of entry.

One of the saddest effects of this whole situation is that we lose focus on other issues in health care. We are so focused on the very real injustices of the industry, that we put aside the actual issue of the patients. Our system is obsessed with healing but ignorant of curing. By this I mean the removal of disease and symptoms at the neglect of re-entering people into society. We must not allow the very serious dilemma of the health care industry to cause us to forget that there is more to health care than an industry.