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AlanNW
Posted Monday, September 14, 2009 9:57 PM


 

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From the Wall Street Journal (link below)

Alan

(and again I say I am all for more regulation to deal with health care issues and insurance issues, but government take over is NOT the answer)

By SCOTT HARRINGTON

In his speech to Congress last week, President Barack Obama attempted to sell a reform agenda by demonizing the private health-insurance industry, which many people love to hate. He opened the attack by asserting: "More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pay the full cost of care. It happens every day."

Clearly, this should never happen to anyone who is in good standing with his insurance company and has abided by the terms of the policy. But the president's examples of people "dropped" by their insurance companies involve the rescission of policies based on misrepresentation or concealment of information in applications for coverage. Private health insurance cannot function if people buy insurance only after they become seriously ill, or if they knowingly conceal health conditions that might affect their policy.

Traditional practice, governed by decades of common law, statute and regulation is for insurers to rely in underwriting and pricing on the truthfulness of the information provided by applicants about their health, without conducting a costly investigation of each applicant's health history. Instead, companies engage in a certain degree of ex post auditing—conducting more detailed and costly reviews of a subset of applications following policy issue—including when expensive treatment is sought soon after a policy is issued.

This practice offers substantial cost savings and lower premiums compared to trying to verify every application before issuing a policy, or simply paying all claims, regardless of the accuracy and completeness of the applicant's disclosure. Some states restrict insurer rescission rights to instances where the misrepresented or concealed information is directly related to the illness that produced the claim. Most states do not.

To highlight abusive practices, Mr. Obama referred to an Illinois man who "lost his coverage in the middle of chemotherapy because his insurer found he hadn't reported gallstones that he didn't even know about." The president continued: "They delayed his treatment, and he died because of it."

Although the president has used this example previously, his conclusion is contradicted by the transcript of a June 16 hearing on industry practices before the Subcommittee of Oversight and Investigation of the House Committee on Energy and Commerce. The deceased's sister testified that the insurer reinstated her brother's coverage following intervention by the Illinois Attorney General's Office. She testified that her brother received a prescribed stem-cell transplant within the desired three- to four-week "window of opportunity" from "one of the most renowned doctors in the whole world on the specific routine," that the procedure "was extremely successful," and that "it extended his life nearly three and a half years."

The president's second example was a Texas woman "about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne." He said that "By the time she had her insurance reinstated, her breast cancer more than doubled in size."

The woman's testimony at the June 16 hearing confirms that her surgery was delayed several months. It also suggests that the dermatologist's chart may have described her skin condition as precancerous, that the insurer also took issue with an apparent failure to disclose an earlier problem with an irregular heartbeat, and that she knowingly underreported her weight on the application.

These two cases are presumably among the most egregious identified by Congressional staffers' analysis of 116,000 pages of documents from three large health insurers, which identified a total of about 20,000 rescissions from millions of policies issued by the insurers over a five-year period. Company representatives testified that less than one half of one percent of policies were rescinded (less than 0.1% for one of the companies).

If existing laws and litigation governing rescission are inadequate, there clearly are a variety of ways that the states or federal government could target abuses without adopting the president's agenda for federal control of health insurance, or the creation of a government health insurer.

Later in his speech, the president used Alabama to buttress his call for a government insurer to enhance competition in health insurance. He asserted that 90% of the Alabama health-insurance market is controlled by one insurer, and that high market concentration "makes it easier for insurance companies to treat their customers badly—by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates."

In fact, the Birmingham News reported immediately following the speech that the state's largest health insurer, the nonprofit Blue Cross and Blue Shield of Alabama, has about a 75% market share. A representative of the company indicated that its "profit" averaged only 0.6% of premiums the past decade, and that its administrative expense ratio is 7% of premiums, the fourth lowest among 39 Blue Cross and Blue Shield plans nationwide.

Similarly, a Dec. 31, 2007, report by the Alabama Department of Insurance indicates that the insurer's ratio of medical-claim costs to premiums for the year was 92%, with an administrative expense ratio (including claims settlement expenses) of 7.5%. Its net income, including investment income, was equivalent to 2% of premiums in that year.

In addition to these consumer friendly numbers, a survey in Consumer Reports this month reported that Blue Cross and Blue Shield of Alabama ranked second nationally in customer satisfaction among 41 preferred provider organization health plans. The insurer's apparent efficiency may explain its dominance, as opposed to a lack of competition—especially since there are no obvious barriers to entry or expansion in Alabama faced by large national health insurers such as United Healthcare and Aetna.

Responsible reform requires careful analysis of the underlying causes of problems in health insurance and informed debate over the benefits and costs of targeted remedies. The president's continued demonization of private health insurance in pursuit of his broad agenda of government expansion is inconsistent with that objective.

Mr. Harrington is professor of health-care management and insurance and risk management at the University of Pennsylvania's Wharton School and an adjunct scholar at the American Enterprise Institute.

http://online.wsj.com/article/SB10001424052970203440104574409501904118682.html
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Joy125
Posted Monday, September 14, 2009 10:20 PM


 

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Scott Harrington, in the above WALL STREET JOURNAL article, wrote:

". . . The president's second example was a Texas woman "about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne." He said that "By the time she had her insurance reinstated, her breast cancer more than doubled in size."

The woman's testimony at the June 16 hearing confirms that her surgery was delayed several months. It also suggests that the dermatologist's chart may have described her skin condition as precancerous, that the insurer also took issue with an apparent failure to disclose an earlier problem with an irregular heartbeat, and that she knowingly underreported her weight on the application.

Oh, my god, if everyone who "knowingly underreported their weight on their application" was dropped from their insurance, the number of uninsured would skyrocket. But I jest. To be serious -- the name of the woman Harrington is referring to is Robin Beaton, and this is the video of her testimony before Congress.

http://www.youtube.com/watch?v=dT_2GjSkzHE

__________________________________________________

Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/
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Joy125
Posted Monday, September 14, 2009 10:42 PM


 

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From the testimony of Wendell Potter, former insurance executive, before the U.S. Senate Committee on Commerce, Science and Transportation, June 24, 2009. An excerpt:


" . . . To help meet Wall Street's relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick. Insurers have several ways to cull the sick from their rolls. One is policy rescission. They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment. Asked directly about this practice just last week in the House Energy and Commerce Committee, executives of three of the nation's largest health insurers refused to end the practice of cancelling policies for sick enrollees. Why? Because dumping a small number of enrollees can have a big effect on the bottom line. Ten percent of the population accounts for two-thirds of all health care spending. The Energy and Commerce Committee's investigation into three insurers found that they canceled the coverage of roughly 20,000 people in a five-year period, allowing the companies to avoid paying $300 million in claims.

They also dump small businesses whose employees' medical claims exceed what insurance underwriters expected. All it takes is one illness or accident among employees at a small business to prompt an insurance company to hike the next year's premiums so high that the employer has to cut benefits, shop for another carrier, or stop offering coverage altogether — leaving workers uninsured. The practice is known in the industry as "purging." The purging of less profitable accounts through intentionally unrealistic rate increases helps explain why the number of small businesses offering coverage to their employees has fallen from 61 percent to 38 percent since 1993, according to the National Small Business Association. Once an insurer purges a business, there are often no other viable choices in the health insurance market because of rampant industry consolidation."

In closing Wendel Potter said:

"Americans need and overwhelmingly support the option of obtaining coverage from a public plan. The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent, publicly-accountable health care option as a "government-run system." But what we have today, Mr. Chairman, is a Wall Street-run system that has proven itself an untrustworthy partner to its customers, to the doctors and hospitals who deliver care, and to the state and federal governments that attempt to regulate it."

TO READ COMPLETE TESTIMONY SEE:

http://www.pbs.org/moyers/journal/07312009/potter_testimony.html

__________________________________________________

Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/
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pat59
Posted Monday, September 14, 2009 11:40 PM


 

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When Your Insurer Says You're No Longer Covered

By Karl Vick
LOS ANGELES -- The untimely disappearance of Sally Marrari's medical coverage goes a long way toward explaining why insurance companies are cast as the villain in the health-care reform drama.
 
 



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Methotrexate 15 yrs, Enbrel 3 yrs, Humira 5 yrs, Rituxan 1 yr, now diagnosed with PSA and RA, back to Enbrel 50mg.x2 a week
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Grandpavan
Posted Tuesday, September 15, 2009 12:43 AM


 

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If government permits shady practices then it is the fault of government for not providing regulations and enforcement to see that it does not happen.  I don't defend these actions by the insurance companies but as long as they are not illegal I can see why they happen.  Government has failed by not making them illegal.  The insurance companies are responsible for making a profit and they do so.  Government is responsible for protecting its citizens and it has failed.  God bless.

Age 82, diagnosed RA 12/2001, married since 1952, 4 sons no daughters, 4 grandsons 1 granddaughter.  Doing well on Methotrexate and Remicade.
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Joy125
Posted Tuesday, September 15, 2009 1:31 PM


 

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The Bush Administration and the Congress from 2000 to 20006 failed to protect its citizens in regards to healthcare. The current Administration and Congress is now taking action to improve access to health care and also curb rising health care costs -- since the failure of reform efforts in 1994, little has been done.

An example of obstructionists to improving access to health insurance deals with what constitutes "pre existing" conditions. In some states, insurance companies can deny health insurance to women who have been victims of domestic violence. In 2006, Democrats tried to end the practice. An amendment introduced by Sen. Patty Murray (D-Wash.), split the Health Education Labor & Pensions Committee 10-10. The tie meant that the measure failed.

All ten no votes were Republicans, including Sen. Mike Enzi (R-Wyoming), a member of the "Gang of Six" on the Finance Committee who are hashing out a bipartisan bill. These ten Senators failed these women in their states -- but then these women probably don't donate as much as the insurance industry to these Senators reelection campaigns.

http://www.huffingtonpost.com/2009/09/14/when-getting-beaten-by-yo_n_286029.html

__________________________________________________

Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/
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Grandpavan
Posted Tuesday, September 15, 2009 2:37 PM


 

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That's still the government.  I don't look at this as a partisan issue but as a national issue.  God bless.

Age 82, diagnosed RA 12/2001, married since 1952, 4 sons no daughters, 4 grandsons 1 granddaughter.  Doing well on Methotrexate and Remicade.
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