Stories about insurance companies denying coverage are all too common (what kind of world is this, anyway?). But yesterday's story that a big insurer would have to pay for it is a surprise (what kind of world is this, anyway, that this is a surprise?):
One of California's largest for-profit insurers stopped a controversial practice of canceling sick policyholders Friday after a judge ordered Health Net Inc. to pay more than $9 million to a breast cancer patient it dropped in the middle of chemotherapy.The ruling by a private arbitration judge was the first of its kind and the most powerful rebuke to the state's major insurers whose cancellation practices are under fire from the courts, state regulators and elected officials.
Calling Woodland Hills-based Health Net's actions "egregious," Judge Sam Cianchetti, a retired Los Angeles County Superior Court judge, ruled that the company broke state laws and acted in bad faith.
"Health Net was primarily concerned with and considered its own financial interests and gave little, if any, consideration and concern for the interests of the insured," Cianchetti wrote in a 21-page ruling. (LA Times)
The second surprise is that the company is not appealing the award. They can't. This was a result of binding arbitration, the forum preferred by insurance companies for settling disputes. It's cheaper for them and they have more clout. But in this case not only must the company pay but it even admits full responsibility. Responsibility for what? Sticking a breast cancer patient with $129,000 in bills, forcing her to discontinue her chemotherapy until a charity agreed to help her pay:
"I felt bad about what happened to her," [Health Net Chief Executive Jay Gellert] said. "I feel bad about the whole situation."
Gellert said he would move quickly to "give people the confidence that they can count on their policy." Specifically, he pledged to stop all cancellations until an external review process could be established to approve all cancellations.
This isn't a practice peculiar to this company. Blue Cross is already said to be re-evaluating their practices, previously defended as a way to control costs. No doubt welshing on commitments to policy holders controls costs. One way this is done is to find pre-existing conditions as an excuse, encouraging employees to do this creatively via bonuses for meeting cancelation quotas. Of course the cancelation only comes when the policy holder makes a claim. Prior to that they are only too happy to collect premiums.
"It's difficult to imagine a policy more reprehensible than tying bonuses to encourage the rescission of health insurance that keeps the public well and alive," the judge wrote.
The majority of the award -- $8.4 million -- was punitive damages, which are designed to teach the defendant a lesson. Such awards are highly unusual in private arbitration, the forum chosen by insurers and other companies to settle disputes.
Health Net's lawyers had argued that Bates' suffering was minimal, a position that infuriated the judge.
"It's hard to imagine a situation more trying than the one Bates had to endure," Cianchetti wrote. "She had valid health insurance, thinks she's making a change when the rug was pulled from underneath and that occurred at a time when she is diagnosed with breast cancer, one of the leading causes of death for women."
It remains to the seen whether this message from an outraged judge will be heard by the industry. It puts the disagreement between Democratic Presidential candidates Clinton and Obama into perspective. They are arguing about whether private health insurance should be mandatory for all (CLinton), or for most (Obama), Americans. The answer is neither. We shouldn't be relying on private insurance companies. A national health care plan should be publicly financed, like Medicare.
You'd think we'd have had enough of being in the hands of a rapacious industry like the health insurance industry. You'd think.
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Thank you for this post. Having worked in primary care for the last 25 years, mostly helping to provide services to people with little or no insurance, it's nice to see the tables turned for once. And, yes, you would think we'd have had enough by now.
One note of caution: I'd be careful of using terms like "welsh" as it is word based in an old English slander against the Welch people. Think "Indian Giver" and "Gyp(sy)" and you have it.
Rene: Thanks. Never realized that was the origin of the word. I will be more circumspect.
The entire U.S. health insurance system needs to be scrapped; it cannot be repaired. Kudos to Judge Cianchetti for making this courageous ruling. I see Ralph Nader has announced his intent to run for president - and I believe his position on health care is Medicare for All. That gets my attention!
revere - you and I don't agree on much but I certainly am happy to see this insurance company get hurt where it apparently counts - the wallet.
I thought "Indian Giver" was a slam against the white man, which is allowed and encouraged in this age of PC.
We all know government cares more about it's corporate citizens than individual citizens, who pay 3 times more Federal Income Tax than the corporate citizens.
One argument that does not seem to come up in favour of a national health care plan is the competitive disadvantage it puts US companies in, which hurts the corporate citizens.
A number of companies have moved across the border into Canada, which has higher corporate tax rates as a result of the health insurance burden for it's employees, costing jobs.
This means fewer jobs in the US, less corporate income tax collected, and more uninsured. It's a no brainer, corporate and individual citizens are both being hurt asa result of not having national health care plan.
http://www.inthesetimes.com/article/2081/
If national health insurance is good for most of the companies and industries (sorry health insurance industry, but you can still offer supplementary insurance), it should be good for the country. Right?
Government already accounts for 1/2 of health care spending, which probably drives up the cost in the private sector since government has negotiated the lowest rates, so they can easily socialize the other 1/2 to keep our businesses competitive. Unless they are encouraging our businesses to leave as part of the globalization agenda, which they also do with tax incentives. Hmmmm.
And instead they would get to wait and wait and wait. And urps, forgot that chemodrug... Its not covered. As so many are in the UHC countries. And you dont get to sue anyone because its all fair and equal under the law..Forget malpractice insurance, you wont need it. You might get some guy who got his MD from south of the border medical school.
UHC is financial suicide for all of the country. We already are having problems with Medicare and financing that fiasco... But Gee, we want bad care for everyone.
Personally, I dont want to have to experiment with my healthcare at all. Especially when MY taxes get raised to pay for someone else who hasnt ever, and wont pay anything in income taxes.
Let them pay the 238,000 bucks I have paid in just income taxes in the last five years and I might find that a bit less egregious than some judges ruling.
Here is a program Revere and then I'll support UHC. Flat tax on everything. You buy it, you pay a national sales tax on it. That way we all have the right NOT to buy something rather than this I wont support UHC, you wont support the military.
Fair enough?
PFT: We've written about that angle here fairly often. It is one of the reasons this thing is coming. Big business wants it. They haven't jumped on board because of class solidarity issues (IMHO) but they always find a way to socialize the losses and keep the profits private. I'm sure they will be creative again.
Randy: You are claiming that chemotherapy for breast cancer is not covered in countries with universal health care? You have evidence for this? And why would it not be covered if the US had UHC? Because, perhaps, we want to have it run by private insurance companies?
This etymological claim interested me, so I looked up the word in the on-line Oxford English Dictionary. It lists the etymology as "obscure", which in OED terminology means they couldn't figure our how it arose, but it is clear that the word is of the same origin as "welch".
If it were as simple as deriving from a slur on the Welsh, I am sure OED would have figured that out. Thus, I think the safest conclusion is that there is no evidence that the term has an origin in an ethnic slur, and we should perfectly comfortable using it.
Sorry PhysioProf, I've been to many, many sensitivity training classes throughout my career, mandatory at that, and your answer is wrong. Perception is what counts, not reality.
Did the judge rule where the money had to come from? Stockholders taking the brunt of the burden? Or are customers going to see premium increases? Gellert sold 26 million dollars worth of stock in August of 2007. Hey, I'm just sayin'....
No I am saying that you could die in a UHC country waiting for a treatment. Available when there is money in the kitty for a new transplant or a bary treatment to put a ring around the stomach.
You are too fat for a treatment. You are too this. There are rules, rules set up by it would seem by ex-insurance company executives.
UHC? Put the economy on suicide watch when they raise the taxes for this little dog and pony act. No way to amortize health Revere. You are or you arent and under this program someone else has to pay for you when you are indigent and dont have a job and that means a lot more people wont. The spiral begins and the problem with this is that no one but the middle class will pay for this. Too dumb to understand that this is not free and as they keep upping the limits of deductible to whats covered by Medicare, they'll do it until we end up with a third world nations healthcare.The people that will benefit the most? The poor as they exploit the system and pay nothing into it.
Forget foreign aid, forget just about all of the other social programs if this is implemented. There simply will not be enough money to pay for it and inflation will go thru the roof.
Mary-Nader gets my attention too. Yawn!
This case invokes me The Rainmaker movie so much! There have been such a big concerns, but I think this case showed the healthcare and law systems do function! Insurance company cheated and was punished - it is a signal to all of companies, showing that there are some rules on both sides - rules for clients and rules for companies. If you want modern, well ongoing health care system, you have to be open-eyed. Life is not easy and you have to cope against many problems, including your health and healthcare...
We have some articles about medical tests and insurance on our Toronto life insurance brokers webpage, just a few crumbs, but may be helpful...
In England, where I live, where healthcare is nationalised, there is an agency called NICE that decides what drugs will and will not be funded on the NHS. Drugs that are not funded have included Herceptin, a breast cancer treatment that was shown to make a huge difference to many women with breast cancer. That perhaps isn't the worst part of it (although it is rather frustrating to English people that people who live in Scotland, which is part of the UK and heavily subsidised by English taxpayers, ARE entitled to many drugs on the NHS which are not available on the NHS across the border in England for no apparent reason). The worst thing is that you are not allowed to "top up" your NHS treatment - which means that if you want to pay for your Herceptin or your experimental/new drug yourself, you immediately get stuck with the bill for ALL of the treatment that would otherwise be available to you on the NHS.
Lots of people over here make the mistake of thinking that all of the NHS's problems would be solved if medicine was privatised and insurance compulsory. I think that's oversimplistic, but I do hope you guys don't make the reverse mistake of thinking that all of your problems would be solved if healthcare was nationalised - because believe you me, they wouldn't be.
Scotland, which is part of the UK and heavily subsidised by English taxpayers
I'm sure we could have a long and largely uninteresting argument about the veracity of that statement, but I'll settle for noting that there is a very large amount of controversy on that particular issue.
Randolph,
I doubt you can provide scientific evidence of the negative relationship between national health insurance and cancer mortality rates. I have looked. If anything, there is evidence that survival rates are increased in countries with national health coverage because of the focus on early detection and treatment (controlling for the very important regional and cultural variables of diet, genetics, and lifestyle).
Your argument holds no water and reflects your political views more than your knowledge of public health. We would all like to better direct how our tax dollars are spent... Not relevant to this discussion. My heart goes out to the people of Appalachia.
Pauls, Nope Indian Giver is a negative about Indians, not white man
More than 500 modern phrases include Indian, most of them U.S. and most impugning honesty or intelligence, e.g. Indian giver, first attested 1765 in Indian gift:
"An Indian gift is a proverbial expression, signifying a present for which an equivalent return is expected." [Thomas Hutchinson, "History of Massachusetts Bay," 1765]
Meaning "one who gives a gift and then asks for it back" first attested 1892.
http://www.etymonline.com/index.php?l=i&p=5
Of course all humans expect repayment for gifts, "civilized" humans are just a bit more circumspect. Its called reciprocal altruism. As in OMG they had us over for dinner now we have to have them back. Or OMG they bought us an expensive Christmas gift, we must go shop now to give them one back.
check out your assumptions
Physioprof
welch Look up welch at Dictionary.com
1857, racing slang, "to refuse or avoid payment of money laid as a bet," probably a disparaging use of the national name Welsh.
http://www.etymonline.com/index.php?l=w&p=4
A fellow casino dealer once told me this joke:
Q: What's the difference between an insurance company and a casino?
A: When the casino loses a bet, they pay you.
Thank you K for your clarification.