Health insurers face day of reckoning
This is a problem-solving moment for government. President Barack Obama and the Democratically-led Congress are rolling up their sleeves, sharpening pencils and trying to deliver health-care changes that cover many more people, provide a safety net for the rest of us and won’t bankrupt our nation the way the current system most assuredly will.
Meanwhile, with little to offer beyond raspberries from the sidelines, Republicans have consigned themselves to the spoiler role. Their answer to the health-care crisis gripping this country (and the answer of a handful of insurance-industry-beholden Senate Democrats) is to throw themselves bodily in the way of a public option in order to protect the rapacious profits of the private health insurance industry.
But what we have learned about free-market health insurance is that even when one can get an individual policy, it is often like having no insurance at all. A standard in the industry is to look for ways to reap premiums, then skip out on promised benefits. This is what the status-quo Republicans are fighting to retain.
A public option is a necessity because it is the only way to temper the demonstrable amorality of private insurers. If companies have to compete with a government plan that doesn’t treat customers like they are a gambler’s easy marks, the companies will have to reform or wither.
Rescission is when people with individual health insurance have their coverage yanked just as they get sick. This industry practice is known as “post-claims underwriting” and is widespread even where there are laws against it, such as in California.
Among its many victims is registered nurse Robin Beaton, 59, who told a subcommittee of the House Energy and Commerce Committee this month of her ordeal at the hands of Blue Cross Blue Shield.
After she was diagnosed with an aggressive form of breast cancer, the company canceled her policy. Beaton says that the company “took my high premiums,” but once she filed a cancer claim, they searched “high and low” for a reason to rescind her policy.
Blue Cross found a notation written on her dermatologist’s chart that seemed to indicate something precancerous. It didn’t matter that her dermatologist called the insurer to say it was just acne. Beaton also had inaccurately recorded her weight in applying for coverage and failed to mention that in the past her heart would beat fast when she was upset. She said that Blue Cross noted these lapses as possible bases for rescission.
A double mastectomy scheduled to save Beaton’s life was postponed until she could find other insurance or pay for the operation herself—an impossibility on both counts.
Beaton said it took direct intervention by her congressman to get Blue Cross to reinstate her policy.
Insurance companies employ people who do nothing but search through a customer’s medical history once an expensive claim is filed, looking for misrepresentations or discrepancies, even unintentional ones, in the insured’s application.
According to the committee’s investigation, at least 19,776 policies were rescinded between 2003 and 2007 by the three insurance companies that testified at the hearing—WellPoint, Assurant Health and UnitedHealth Group. The moves saved them at least $300 million.
Policies are canceled for failing to disclose information even when patients didn’t know what doctors had written on their medical charts. Rescission can occur even if an omission is unrelated to the policyholder’s current ailment.
Assurant automatically initiates an investigation into the policyholder’s medical history if a claim is made for one of 2,000 diagnosis codes. For WellPoint, it’s 1,400.
When top executives of the three insurers were asked by subcommittee chairman Rep. Bart Stupak, D-Mich., if they would vow to limit rescissions to cases where there had been an intentional fraudulent misrepresentation, they all answered “no.” Dumping the sick is simply too good for business.
Private insurers are squealing about the possibility of a government option, but they brought this on themselves through their greed and predation. We can’t trust them to do what’s right when we get sick. Now it’s their turn to feel a little sick themselves.
Robyn Blumner is a civil liberties and labor law expert who writes about individual freedom, trade, globalization and workers’ rights. She is a columnist for the St. Petersburg Times in St. Petersburg, Fla., and syndicated by Tribune Media Services. E-mail her at blumner@sptimes.com.

Jul 2, 2009 at 4:17 a.m.
Suggest removal
Red, how do you know anything about my “fortunate” healthcare? I love to hear how others think vets are “fortunate” to have earned their healthcare benefits. As I have said plenty of times before; feel free to follow in the shoes of those who went before me, with me, or after me. After serving you can then have the honor or distinction to belong to many of the service support organizations, like Disabled American Veterans, Veterans of Foreign Wars, and American Legion meetings to meet the other “fortunate” people; I am proudly a member of all three. You should also learn what it takes to become a member.
It is obvious by reading your post you know nothing of veteran’s insurance benefits or what it takes to earn or qualify. Do yourself a favor; read, research and ask questions before assuming and posting statements that are false.
Jul 1, 2009 at 11:46 p.m.
Suggest removal
To Retired Airforce: How do you propose to provide healthcare to those who are not fortunate enough to obtain it by virtue of being a vet. Maybe we should make service in the armed forces mandatory for every youth between the ages of 18 and 21. Then they would qualify for the same veterans insurance benefits that you do. And if military service were mandatory for all youth between 18 and 21 years of age then in just 18 short years all our young adults would be covered.
Jul 1, 2009 at 11:40 p.m.
Suggest removal
Healthcare in a civilized society has always been viewed as a public service. We have a long way to go before the best interests of our citizens are served for the benefit of us all. Heathcare must be made available and affordable for all. Solving the problem of healthcare will go a long way toward solving the problem of unemployment. If affordable healthcare is no longer dependent on employment then employers will start hiring again in droves. What is beneficial to one is beneficial to all. What harms one harms us all. Let's come together to reform this industry in a sensible way that is beneficial to all. Amen to this article.
Jul 1, 2009 at 11:20 p.m.
Suggest removal
"establishment of an overall budget and the fair and rational distribution of resources."
-
For those not aware...this is rationing.
Jul 1, 2009 at 11:18 p.m.
Suggest removal
"What is the back up plan?"
-
Flashback from a movie (Armaggeddon), Bruce Willis character says “And this is the best that you c - that the-the government, the *U.S. government* can come up with? I mean, you-you're NASA for cryin' out loud, you put a man on the moon, you're geniuses! You-you're the guys that think this…up! I'm sure you got a team of men sitting around somewhere right now just thinking stuff [edit] up and somebody backing them up! You're telling me you don't have a backup plan…?
Jul 1, 2009 at 11:11 p.m.
Suggest removal
Myth #1 is that we can’t afford a national health care system, and if we try it, we will have to ration care. My answer is that we can’t afford not to have a national health care system. A single-payer system would be far more efficient, since it would eliminate excess administrative costs, profits, cost-shifting and unnecessary duplication. Furthermore, it would permit the establishment of an overall budget and the fair and rational distribution of resources. We should remember that we now pay for health care in multiple ways – through our paychecks, the prices of goods and services, taxes at all levels of government, and out-of-pocket. It makes more sense to pay just once.
According to Myth #2, innovative technologies would be scarce under a single-payer system, we would have long waiting lists for operations and procedures, and in general, medical care would be threadbare and less available. This misconception is based on the fact that there are indeed waits for elective procedures in some countries with national health systems, such as the U. K. and Canada. But that’s because they spend far less on health care than we do. (The U. K. spends about a third of what we do per person.) If they were to put the same amount of money as we do into their systems, there would be no waits and all their citizens would have immediate access to all the care they need. For them, the problem is not the system; it’s the money. For us, it’s not the money; it’s the system.
Jul 1, 2009 at 11:11 p.m.
Suggest removal
Myth #3 is that a single-payer system amounts to socialized medicine, which would subject doctors and other providers to onerous, bureaucratic regulations. But in fact, although a national program would be publicly funded, providers would not work for the government. That’s currently the case with Medicare, which is publicly funded, but privately delivered.
As for onerous regulations, nothing could be more onerous both to patients and providers than the multiple, intrusive regulations imposed on them by the private insurance industry. Indeed, many doctors who once opposed a single-payer system are now coming to see it as a far preferable option.
Myth #4 says that the government can’t do anything right. Some Americans like to say that, without thinking of all the ways in which government functions very well indeed, and without considering the alternatives. I would not want to see, for example, the NIH, the National Park Service, or the IRS privatized. We should remember that the government is elected by the public and we are responsible for it. An investor-owned insurance company reports to its owners, not to the public.
I want to mention one final and very important reason for enacting a national health program. We live in a country that tolerates enormous disparities in income, material possessions, and social privilege. That may be an inevitable consequence of a free market economy. But those disparities should not extend to denying some of our citizens certain essential services because of their income or social status. One of those services is health care. Others are education, clean water and air, equal justice, and protection from crime, all of which we already acknowledge are public responsibilities. We need to acknowledge the same thing for health care. Providing these essential services to all Americans, regardless of who they are, helps ensure that we remain a cohesive and optimistic country. It says that when it comes to vital needs, we are one community, not 280 million individuals competing with one another. In seeking to ensure adequate health care for all our citizens, we have an opportunity today to reassert that we are indeed a single nation.
Excerpts from Dr. Angell's Introduction to the National Health Insurance Bill
"Rep. Conyer's HR676"
By Marcia Angell, M. D. Senior Lecturer, Department of Social Medicine, Harvard Medical School Former Editor-in-Chief, New England Journal of Medicine
Jul 1, 2009 at 11:03 p.m.
Suggest removal
The private insurance industry spends about 20 percent of its revenue on administration, marketing, and profits. Further, this industry imposes on physicians and hospitals an administrative burden in billing and insurance-related functions that consumes another 12 percent of insurance premiums. Thus, about one-third of private insurance premiums are absorbed in administrative services that could be drastically reduced if we were to finance health care through a single non-profit or public fund. Indeed, studies have shown that replacing the multiplicity of public and private payers with a single national health insurance program would eliminate $350 billion in wasteful expenditures, enough to pay for the care that the uninsured and the underinsured are not currently receiving.
Jul 1, 2009 at 10:10 p.m.
Suggest removal
This bill will pay for 12 to 14 million Illegals.
This bill will pay for 12-14 million who can afford health insurance but don't.
This bill will pay for 10 million rich who can afford the best.
This bill will pay for 15 million who really need insurance.
Question is, why is this bill covering illegals, people who can afford but don't, and the rich.
What happens if this turns into another government fiasco? What is the back up plan?
Jul 1, 2009 at 9:47 p.m.
Suggest removal
www.singlepayeraction.org
Get informed and take action! We can make a difference if you really want to see anything change in our lifetime.
Jul 1, 2009 at 8:23 p.m.
Suggest removal
From today's virtual health care reform meeting,
"Obama said a government-run "single-payer" health care system works well in some countries. But it is not appropriate in the United States, he said, because so many people get insurance through their employers working with private companies."
***HELLO! WE ARE IN A CRISES OF UNEMPLOYMENT! WHAT ABOUT THE MILLIONS OF PEOPLE WHO DO WORK AND THEIR JOBS DO NOT OFFER HEALTH INSURANCE! (i.e. mcd's, grocery stores, wal-mart) Seems like the government employees have no problem keeping their sweet plans while we the average joe get billed insane amounts of money just for getting blood pressure checked and a pill from the ER!
We the people who pay taxes, should be able to see the money being spent on improving the health of millions and saving thousands of lives INSTEAD of seeing it being thrown down the toilet or handed over to CEO's of Wall Street. NOT TO MENTION the END of foreclosures and bankruptcies directly resulting from medical debt! (Even WITH INSURANCE) There IS NO bankruptcies filed in canada, england or france because of medical bills.
INTERESTING FACT:There are four times as many health care lobbyists as there are members of Congress.
* According to the Center for Responsive Politics (www.opensecrets.org), in 2005 there were 2,084 health care lobbyists registered with the federal government. With 535 members of Congress, that's 3.895 lobbyists per member.
Jul 1, 2009 at 7:53 p.m.
Suggest removal
Yes to Obama's plan. Free market doesn't work, if you or anyone in your family are not in perfect health the insurance companies will not sell you health insurance. If you are in perfect health there is a good chance you can't afford it as a family policy is $1000 to $1400 per month for an average policy.
Jul 1, 2009 at 7:34 p.m.
Suggest removal
Free public health care and medications for everyone wanting it and this dual choice public/private system will save taxpayers hundreds of billions of dollars annually.
Businesses that choose public care for their employees would have no financial obligations or any other responsibilities concerning health care.
If you like private care, keep it, no change.
Ask the President and your representative’s to include this dual public/private option in the health care reform discussion.
The cheapest way to collect money to pay for health care is through a national sales tax, and not by forcing people and companies to purchase questionable insurance to pay excessive costs for services in a failed system.
50 million uninsured people along with everyone else, who wanted to drop private care and receive free public care and medications, including seniors on Medicare, could do so and the annual costs would still be hundreds of billions of dollars less than the $2.5 trillion spent last year.
Jul 1, 2009 at 7:24 p.m.
Suggest removal
Robyn - you are ridiculous. A 15 minute MRI is over $3,500. A doctors visit is almost $200. Why are you not pointing your finger at the health care providers? Insurance companies aren't perfect, but neither are the medical institutions. I know someone that had surgery, the hospital screwed up his care, resulting in an additional surgery. The insurance company paid both large claims. But should they have to? Why does the insurance company or the consumer have to pay for the hospitals negligence? Not to mention hospitals and clinics that charge reduced rates for uninsured patients. If they can charge less for uninsured patients, why are health insurance companies expected to pay the higher charges? Believe it or not, health insurance companies do not employ a team of people to review medical records to cancel policies, and Robyn, I would be careful because it sure sounds like slander and libel to me. I think you should look at the whole picture before you point your finger. Medical providers need work too, not just the health insurance companies, and government run health care is NOT the answer.
Jul 1, 2009 at 6:28 p.m.
Suggest removal
The reason there would be less waiting, is that those without insurance now would not need to use the emergency room as their primary care. Unfortunately, the government is NOT involved enough in the health care system. There is not a way to bring ruthless insurance companies to justice. Those same companies have paid for the laws that prevent you from suing them when they screw you.
Jul 1, 2009 at 11:48 a.m.
Suggest removal
The government is already in control of too much! I don't want them involved in my healthcare!they don't run anything else without it costing at least 3 or 4 times more than what it really costs. remember th $600. toilet seats and other things like screws that cost hundreds of dollars!!! NO WAY!!!!
Jul 1, 2009 at 11:13 a.m.
Suggest removal
Insurance companies, even when they do rescind, do so with a small fraction of 1% of policies. I noticed the writer didn't find nor even write about anyone who had actually lied on their insurance application, which is what leads to a recission in the first place. What are the odds?
As for the poster below, if the government provides more 'free' care to people and we have the same number of doctors and hospitals (receiving lower payments under a government plan no less), I would be interested to know how that would result in less waiting. In Massachusetts, since they implemented a free healthcare system (that's already bankrupt), waiting times have skyrocketed for this very reason.
Democrats live in a contrived world of their own making. The problems show up when they step out of their echo chambers and into reality.
Jun 29, 2009 at 4:27 p.m.
Suggest removal
For those who are screaming about how a government health insurance will ration care, cause waiting lines for treatment, etc. must open their eyes to what we currently have for 'private' health insurance. I have wasted too many hours fighting with insurance companies and medical providers about what 'codes' were used and just outright denials. Too often even when you have documentation provided by your insurer authorizing benifits, they will string you along with denial after denial. A government plan can do no worse than the current system, and I believe there would be less waiting and more access than most currently have now.
Before you post a comment, consider this:
Note: GazetteXtra.com does not condone or review every comment. Read more in our User Policy AgreementPost Comment
Commenting requires registration.