Effect Measure

Health insurance company whacked

If you want to know why I despise every Republican Senator and Democratic Senators Ben Nelson, Evan Bayh, Blanche Lincoln, Max Baucus, “Independent (of morals)” Joe Lieberman and probably a bunch more whose names I am repressing, it’s because they enable and support and help entrench as the bedrock of our health care system, insurance companies. Here’s what these companies are like:

A Boulder County jury has ruled that a health insurance company must pay $37 million to a Lafayette woman whose health insurance policy was canceled after she was seriously injured in a car accident.

The insurance company had said she failed to disclose previous medical treatments, namely an emergency room visit for shortness of breath and treatment for uterine prolapse. The company refused to cover roughly $185,000 in medical bills from the accident and canceled the woman’s policy.

[snip]

Latham, now 39, suffered multiple compound fractures and a brain injury when a suspect fleeing police rammed into her car in October 2005 near the intersection of 23rd Avenue and Collyer Street in Longmont.

Latham spent a month at Longmont United Hospital and another month at the Mapleton Center for Rehabilitation, Levy said.

Five months before, she bought an individual health insurance policy from Time Insurance Co. for herself and her two younger children. Her older children were covered under her ex-husband’s insurance through work.

Soon after she was released from the hospital, she received a letter from Time Insurance informing her the company had rescinded her policy and would not pay her expenses from the accident. The decision to cancel her policy also made it nearly impossible for her to get insurance from other companies, Levy said. She now receives Medicare benefits. (Erica Meltzer, Daily Camera [Boulder, CO], hat tip reader Gaythia)

Assurant/Time Insurance aren’t the only insurance company to do things like this. WellPoint Inc., UnitedHealth Group and other big health insurers have canceled coverage of more than 20,000 people, avoiding $300 million in a 5 year period. As Mrs. R. is fond of saying, “How do these people sleep at night?”

The CEO of Assurant may not be sleeping so well in the future. Ms. Latham sued his company and her lawyer asked the jury to consider how they think an insurance company should act and to award her $7 million. The jury didn’t agree with her lawyer.

They awarded her $37 million.

Comments

  1. #1 Greg Laden
    February 1, 2010

    Nice. I hope it holds up.

  2. #2 Paul Browne
    February 1, 2010

    What Greg said:-)

  3. #3 Jer Breck
    February 1, 2010

    How can they get away with something so blatantly stupid in the first place? It’s not as if her uterine prolapse predisposed her for getting hit by a car. Happy to be Canadian and not have to worry about this stuff.

  4. #4 Raka
    February 1, 2010

    Jer @3: It’s called “rescission”. If an insurance company discovers that you misrepresented yourself in your initial application, they can cancel your policy and deny responsibility for anything that they haven’t already paid for. So if you bought fire insurance on a house, and the insurance company discovers that it was already burning at the point where you purchased the policy, they don’t have to pay after the fact. This is sensible, ignoring the moral considerations it carries when applied to health care. They don’t have to prove that you actually carried out fraud or had fraudulent intent– just that you failed to provide the necessary information to enter into the the contract, and thus the contract is broken.

    That’s rescission in theory. In practice, it ends up as the example above: as soon as you look like you’re going to be expensive, they have incentive to go digging into your records. Anything you may well have just forgotten still qualifies as a technical violation, and will be used to cancel a policy that they were perfectly happy holding right up until your (usually TOTALLY unrelated) accident or illness.

    This is one of the things that the current bill explicitly prohibits. We’ll see if that survives.

  5. #5 Alex
    February 1, 2010

    @Revere: “As Mrs. R. is fond of saying, “How do these people sleep at night?”” I don’t know if you’ve seen the documentary The Corporation (the one with Chomsky, Moore and Klein in it). Michael Moore gives the answer to that at the end.

  6. #6 OleanderTea
    February 1, 2010

    We need about 1,000 more of these judgements.

  7. #7 Jer Breck
    February 1, 2010

    Raka: I guess my question was more rhetorical than anything but thanks for that crystal clear explanation.

    In cases where the reason for rescission is completely unrelated to the health claim, it seems more like an insurance company refusing to pay a fire insurance claim because you didn’t tell them that you baked a lasagna three years ago.

  8. #8 D. C. Sessions
    February 1, 2010

    This is one of the things that the current bill explicitly prohibits. We’ll see if that survives.

    You mean the bill? Prognosis is unfavorable.

    We need about 1,000 more of these judgements.

    They would be just a small part of the cost of doing business, and less expensive than actually paying claims. A modest raise in premiums would more than cover the judgments. Averaging out rare hazards like this is, after all, what insurance companies do.

  9. #9 Tony P
    February 1, 2010

    I’m curious how the insurance companies are obtaining the information in order to support their rescission of policies.

    After all, wouldn’t that violate HIPPA? I had this discussion with my M.D. He won’t transmit his actual findings during a physical. He just does the billing code and 99% of the time it gets paid. So how are the insurance companies getting the pre-existing condition info?

  10. #10 MoM
    February 1, 2010

    @Tony #9

    In most instances, when you sign up for insurance, one of the (many) things you have to sign is a waiver that gives the companies access to your records.

  11. #11 MS2
    February 1, 2010

    This won’t ever stop. There is just too much money to be made by denying claims. As mentioned above, monetary punishments just don’t cut it as the costs simply tend to be distributed among premiums. We need to have jail time for the CEOs of companies that engage in practices that lead to delayed treatment and poor outcomes.

  12. #12 BostonERDoc
    February 1, 2010

    This is why medicine is broken. The 37 million reward is just as whacked as the insurance companies policies. I am sure it wont hold up in appeals but if it does who do you think is going to foot the bill? Seems everything is so reactionary and over the top these days and reasonable souls are sick of it (Go Scott Brown , Go Scott Brown).

    Revere’s broad generalization and hatred for someone not of his political agenda (i.e. Republican) is just as despicable. I hope your approach to your research and patient care is more open minded and less reactionary and assuming than your political practices.

  13. #13 revere
    February 1, 2010

    BostonERDoc: My scorn was for those who delivered us into the hands of the insurance industry, which includes every single Republican Senator and too many Democratic ones. You can’t accuse me of being partisan on this. And anyway, how is this different than a blanket scorn of trial lawyers or litigants? Frankly, whacking these guys is fine with me. It’s up to insurance regulators to prevent the costs from being passed on, which, I suppose if they are anything like Boards of Registration in Medicine is probably a vain hope.

  14. #14 caia
    February 1, 2010

    Raka — Unfortunately, all the current bill prohibits is recission in the absence of fraudulent applications. Which sounds fine, except that’s the pretext they use now. Besides which, someone would have to enforce that rule, and as it stands now, states such as California have decided they don’t have the money to go after these companies, who have armies of lawyers at their disposal.

  15. #15 Alex
    February 1, 2010

    @Revere: You don’t really have to defend your point on this. This isn’t as much a debate between Red or Blue as it is a debate between presence or abscence of ethics in a certain line of business. It’s just that BostonERDoc framed this as Red vs. Blue. And yes, whacking these guys should be a priority regardless of where one stands politically. I didn’t understand the comparison to Boards of Registration in Medicine (I’m not a doc), care to explain?

    @caia: Unfortunately, until the recession is over and that might take years, they won’t have the money. In order to fight Big Insurance’s army of lawyers, California would have to assemble their own army of lawyers.

  16. #16 revere
    February 1, 2010

    Alex: Boards of Registration in Medicine are notorious for not disciplining their members. In some states (probably most, but I know most about the one where I have my license) I’m not sure what you have to do to lose your license. Even raping you patients didn’t do it until it hit the newspapers. Screwing them in other ways? Forget it. Listen, I’m a doc and I think most doctors are ethical and dedicated. But they get a free pass, just like insurance companies from regulators.

  17. #17 Alex
    February 1, 2010

    @Revere: They actually got away with raping patients? Even politicians can’t get away with rape. I’ll leave Math and switch to Medicine then. =)

  18. #18 Keith Harwood
    February 1, 2010

    I find these sort of stories disgusting and I find it disgusting that Americas accept them.

    Here in Oz the health insurance companies can refuse coverage for pre-existing conditions for six months after joining (you don’t have to disclose them, or even know about them). After that period, you are covered. If it’s not pre-existing you are covered from the moment you join.

  19. #19 Alex
    February 2, 2010

    By the way, about Boards of Medicine punishing bad docs, I suggest everyone here go read Orac’s latest post about Wakefield, on the blog Respectful Insolence. He really went to work on that crank and even threw in biblical images. It’s really long but really good.

  20. #20 M. Randolph Kruger
    February 2, 2010

    It really goes back to whether health care is a right or privilege. Its a privilege at best. The 37 million award is pure BS and she availed herself of the system and it gave her a huge win. There is NO way that will hold up in appeal and they damned well know it. Couple of million at best, or a toss out. And well it should. She is on Medicare? What, Colorado doesnt have state run healthcare….Like Tennessee? I am shocked I tell you, shocked. But now she is excluded for suing more likely than the condition. She can get healthcare now with the 7 million award and then some.

    Now, do you think you wont be able to sue if UHC was in place? Then who pays? Guess, dont take too long on it… Yep you are right, the system has to raise taxes for wrongful deaths, inadequate care and the like. The only difference in this is the holders of UHG policies. They can at least opt out. UHC that demands participation is only going to work if they limit your ability to sue the government and that would come rapidly rather than the economic demise of the program. Hey, Mass is heading down the toilet with their program… Who do I see about that? Their unemployment though is steady…Because everyone is leaving the state. The fine is too much for not participating.

    WTF am I the only one who gets it that there isnt anything in the Constitution that affords anything other than the right to PURSUE life, liberty and happiness. It makes no mention that anyone owes you a living, owes you a college education, owes you a car, owes you a home. This administration is all about love me because I am Obama…. I dont care what it costs. Well boys and girls someone has to pay for this stuff. At least you have insulation from the government with this. You have the right to pick and choose. You dont and wont with UHC. Take it or leave it, but if you leave it we will still tax you for it.

    And you Canucks, Brits, Swedes, Germans, Finns and Dutch have all seen rises in your payments and taxes in the last 10 years, drops in care. Absolute horror stories that you would expect in those terrible places in the US like Detroit. Cant blame that on Republicans now can you? But its all about the money. We have now spent ourselves into oblivion across the planet and now they want to spend even more. Worldwide double down equates to a complete collapse later.

    Raise the debt limit but go down like the Titanic doing so. Hey, how about that Medicare that Revere loves so much….

    How about the estimates going up by more than a half in just 5 years, just under half more. Why? Inflation generated by a spendathon government. That unfunded mandate for prescriptions for elders cost 7 trillion alone and thats the low side estimate. Some put it as high as 12. By 2035 Social Security and Medicare will account for 122% of all dollars in the economy…In other words done. It will never get that high because they will be back in the same boats they were with the insurance companies. They might cover the pre-existing, but your decisions will be made whether to buy pills or to eat. Duh….

    Better get used to economic collapse, end of social welfare and life as we all know it. There will be either a French or British type of revolution instead. Its starting already with the baggers and birthers and lets hope it stays within the system. You can see the seeds of dissent as the system tries to right itself with the election of Scott Brown. Another RINO in my book…. The only people likely to rule the earth as a result are the Mormons which will drive Revere crazy.

    So what do we do if it collapses Revere? Would you make a decision whether to eat or pay for healthcare or your fine for not participating? UHC is cash flow for the government is all it is and that over burgeoning government will be taken out by the people and very likely not peacefully. Print this out, most of you have never been in the middle of a revolution or countries that were in the throes of one. I have. You’ll be selling your daughters on the streets for a meal. People like BostonER will be in high demand and I doubt he will take that paper we call the dollar when this happens. Can of pork and beans to set that leg mister….

    Now if this guy below has been posting on it before the banks went boom and now is posting on it about whats about to happen then I think you should pay attention. I know him and he has called every one of these disasters. Our consensus is that the newest one is going to do us.

    http://www.marketwatch.com/story/our-debt-time-bomb-is-ready-to-go-ka-boom-2010-02-02

    That’s okay, they’ll just blame Bush and try to force people to take worthless money for their work and health care for anyone will become a thing of the past. That would include those who had insurance before this BS started on Worldcare.

    No need to respond anyone, you’ll just call it a mindless rant as you always do. The same people who said we werent about to be in a shooting war also missed that we are positioning for Iran…within a month. Those are the same people who said that birthers and tea baggers were crazy and dumb and that only they could possibly be right. Well who is being respectful now after the MA elections?

    Lets not forget the AGW while we are here. Pure bullshit that roiled for years. We are all gonna die from hot. Hell its looking like we are going to die from ice and about those great big lies that a certain former VP pumped into the tail feathers of the Senate and House. Who do I see about that. Lets not forget that world weather and policies are being dictated by a Phd. dissertation student. Yep, its all about Health Care. NOT ! Its about control and government does a better job, and so far I am not seeing it.

    Yep, no reason to reply. I wont answer it for about 253 days from now…. November 7th. They will of course say that the election was stolen too.

  21. #21 Alex
    February 2, 2010

    Revere, is there a way to erase comments on a post or ban certain people from posting more? Once you read the above, you’ll understand why I’m asking.

  22. #22 dmcw
    February 2, 2010

    I find Randolph Kruger very entertaining. Although the paranoia usually stops me from getting past the first few sentences!

  23. #23 caia
    February 2, 2010

    Alex: There is no emoticon that makes rape jokes funny.

  24. #24 History Punk
    February 2, 2010

    Kruger, if you read Imperial Hubris, the author, head of the CIA’s Alec Station, talks about how open Bin Laden and his associates were about attacking the United States to specifically lore the US into wars in order to collapse the economy.

    Since Bush fell for that trap, it would be his, in part, fault.

  25. #25 K
    February 4, 2010

    You do realize History Punk that at one time the US funded the Muhajadeen to fight against the Russians in Afganistan. Hillary says we did… http://www.youtube.com/watch?v=X2CE0fyz4ys Obama was one of the Muhajadeen.

  26. #26 K
    February 4, 2010

    correction, OSAMA bin Laden was one of the Muhajadeen, not Obama.

  27. #27 nia
    February 5, 2010

    agreed with caia – no rapes jokes are funny except to the worst misogynists. And then Alex asks for someone elses comment to be erased!

  28. #28 Neil in London
    February 5, 2010

    ‘And you Canucks, Brits, Swedes, Germans, Finns and Dutch have all seen rises in your payments and taxes in the last 10 years, drops in care.’

    As a ‘Brit’, I haven’t seen these healthcare related tax rises to which you refer.

    But it really doesn’t matter anyway, because we are not averse to spending money on the NHS. One of the reasons New Labour were elected in 1997 was that they said they would spend more money on health and education. They did, and continue to do so. Good. They kept their promises and we’re not complaining on that front, even if we’re yelling about other things.

    Obviously I can’t speak for the Germans, Finns etc but as for declining standards in UK care: nonsense. ‘Horror stories’ in the UK are exactly that: anecdotal, emotionally charged…..and mostly fictitious. Even if, occasionally, there are elements of truth, they are so rare that they…da dahhh!… make the headlines.

  29. #29 OleanderTea
    February 5, 2010

    I’m curious how the insurance companies are obtaining the information in order to support their rescission of policies.

    Google the Medical Information Bureau (MIB).

    After all, wouldn’t that violate HIPPA? I had this discussion with my M.D. He won’t transmit his actual findings during a physical. He just does the billing code and 99% of the time it gets paid. So how are the insurance companies getting the pre-existing condition info?

    No. HIPAA allows for transfer of information between entities with a legit business need. Underwriting is considered a legit business need. Especially since the MIB is owned by…insurance companies!

    When your MD submits a claim for treatment, s/he submits a diagnosis code on the claim (and diagnosis codes are mandatory under the HIPAA-approved claims standard). That diagnosis code then becomes part of your medical history.

  30. #30 OleanderTea
    February 5, 2010

    @ M. Randolph Kruger:

    She is on Medicare? What, Colorado doesnt have state run healthcare….Like Tennessee?

    The woman had private insurance. She was kicked off it inappropriately. In that case, a disabled person gets Medicaid, which someone who’s disabled stays on for a period of time (I think it’s 18 months, but it could be less time). Once the disability is deemed permanent, one goes on Medicare.

    Medicaid is state-level. Medicare is federal.

    You really should learn about the system before you rant against it.

  31. #31 M. Randolph Kruger
    February 7, 2010

    Oleander-Troll reading…..or is it tardo for not reading it fully. Typical lefty….

    ” Levy said. She now receives Medicare benefits. (Erica Meltzer, Daily Camera [Boulder, CO], hat tip reader Gaythia)”

    I of course will let the game clock run on but I did want to bring your mistake to your attention so that you wouldnt open mouth and insert state aid.

  32. #32 Paula
    February 7, 2010

    re 9, 10: When I was 60, I applied to a major health insurance company for an individual policy. The reply was that I could only get their “high risk” insurance, given that I had an RSI (covered, as I’d told them, by Worker’s Comp) and that, 3 years earlier, I had received a 10-pill ativan prescription, for possible use during a camping trip in an area with scary bears (the pills were never used). The interesting thing is that I had bought the pills, at a small neighborhood pharmacy, using a personal check, and so it is unclear what record the company might have legitimately researched; (less relevantly, perhaps, “fear when camping in ursine habitat” is not a medical condition).

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