22 April 2010

Insurance Companies behaving badly, part 27

WellPoint routinely targets breast cancer patients

(REUTERS) One after another, shortly after a diagnosis of breast cancer, each of the women learned that her health insurance had been canceled. First there was Yenny Hsu, who lived and worked in Los Angeles. Later, Robin Beaton, a registered nurse from Texas. And then, most recently, there was Patricia Relling, a successful art gallery owner and interior designer from Louisville, Kentucky.

None of the women knew about the others. But besides their similar narratives, they had something else in common: Their health insurance carriers were subsidiaries of WellPoint, which has 33.7 million policyholders -- more than any other health insurance company in the United States.

The women all paid their premiums on time. Before they fell ill, none had any problems with their insurance. Initially, they believed their policies had been canceled by mistake.

They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.

Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women's specific cases without a signed waiver from them, citing privacy laws.

I wish I could say I was surprised, even a little bit.  If this were not such a repeated, systematic pattern of profit protection abuse by insurance companies.  This is why Health Care Reform is a good thing - it will to a great degree curb these abuses.  No regulation can prevent deliberate law-breaking, of course, and enforcement will be key.  But under the new law, rescissions are not permitted except under very clear situations.  Whether the law will actually be enforced adequately remains to be seen.

When I read this stuff, it makes me so angry that I wonder again whether single payer would have been so bad after all...



7 comments:

  1. unfortunately, it's my understanding that the Senate HCR bill signed into law did NOT include the language that banned this sort of recission.

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  2. Bad faith insurance lawsuits must be so satisfying to win.

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  3. Roughly 15% of the population has lied on a mortgage form in the last 5 years. In fact, these lies have a lot to do with our current financial predicament.

    Wellpoint has found less than 1% of their customers haven't been truthful in outlining pre-existing conditions. Shocking, considering the % of people that have lied on their mortgage applications.

    Insurance is a risk game. If you aren't honest in telling the insurer your risk level for a disease, then they are effectively robbing from the other members.

    These people could have been truthful with their pre-existing conditions, but they opted not to because they tried to save some money. They could have said "yes, I have a much higher than average chance of getting breast cancer due to X, so I will take a lesser priced policy that excludes coverage of breast cancer OR I will pay a much higher premium." But they didn't. They cheated. They got caught.

    Do you think the people that lied to the insurance companies about their pre-existing conditions are being honest when they tell the press about their reason for being dropped? When they know that the insurance company cannot knowingly reveal the true cause due to confidentiality?

    If they have really been wronged, a jury will award them massive damages. Any jury would be happy to write that award.

    The insurance companies must feel they have an airtight argument here, especially in today's climate.

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  4. Anon 6:40 -- It's so cute that you assume the insurance companies acted in good faith.

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  5. Shadowfax writes: "Anon 6:40 -- It's so cute that you assume the insurance companies acted in good faith."

    Did they dump all breast cancer patients? No, they didn't. They dumped a small percentage that they determined lied about pre-existing conditions.

    If they acted in bad faith--eg it can be readily shown that the insured person did nothing wrong--then you can be certain the insurance company would be creamed in court.

    The cost to treat breast cancer averages $31K today. If a woman was dropped "for no reason", don't you think it'd be easy to recover $250,000 from the insurer in a lawsuit? That's a no brainer. Especially if she couldn't get more coverage and the condition got worse.

    You gotta believe the insurer has an airtight case here. No way on earth would they drop someone with cancer for no reason, given the certainty of a lawsuit and the comparatively small cost to treat the cancer.

    Think, Shadowfax, think. Given all your training, I'm a bit shocked at your reasoning skills here.

    Now, if she lied about pre-existing conditions that were indeed indicative about her breast cancer risk (mother died at 38 due to breast cancer, sister diagnosed at 42), do you believe they have a right to drop her?

    If she had breast cancer before, and lied about that, do they have a right to drop her?





    http://www.cbcrp.org/research/PageGrant.asp?grant_id=2591

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  6. excuse my thinking but why should there be disclosure on what medical condition is or isn't pre-existing. ALL people have the right to medical care. I am an RN and it upsets me to no end when I hear of young mothers dying of illnesses that are treatable. I have worked in the USA system and in the canadian system and I can honestly say, hands down, the Canadian system wins.
    You can cite isolated incidents that you heard third hand all you want but as an RN of 33 yrs working in every area of a hospital...I think I represent most Canadians.

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  7. Because the job of insurance is to pay for rarely occurring events.

    If you want insurance to cover sore throats, then in fact you aren't looking for insurance, you are looking for pre-paid medical.

    In the US, our middle class has tax wedge of 11.9%. In Canada, your middle class family has a tax wedge twice that.

    The wax wedge is how much you and yoru employer pay in taxes on your behalf.

    So, your middle class is really paying quite a bit for this "right" you mention. In the US, our middle class instead prefers huge cell phone plans, lavish vacations, power boats and huge houses.

    Of course, when your politicians get sick, I note they opt to get treated int he US. With the waits and all. We tend to believe that speedy service is a right.

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