California Health Insurers Must Reinstate Policies
Chalk one up for sickly patients. California regulators have ordered insurers there to reinstate the health insurance policies of 26 people who lost their coverage after the insurers claimed they had lied on their applications, according to news reports. The 26 cases represent the most egregious examples of insurers wrongly "rescinding" policies, typically for inadvertent errors. The person gets sick and starts making expensive claims, and the insurer cries "fraud!" The patient says "forgot!" or sometimes "say what?" For example, one woman I spoke with on this topic had answered "no" when asked if she'd been treated for cancer in the past 10 years. Later her policy was yanked because the insurer claimed that regular blood work she had to ensure her earlier cancer hadn't returned constituted cancer treatment.
Now California begins a case-by-case review of thousands of rescissions in the past four years, and it may be that these 26 are the tip of a fairly hefty iceberg. And consumer advocates say there's no reason to believe this issue is confined to California. They expect similar cases to begin emerging elsewhere.
These problems arise in the individual market, where people buy policies on their own. That market is much more loosely regulated than the group market—and often more problematic for patients—as I discussed a few months ago.
Right now, only about 5 percent of people buy insurance this way. But if Sen. John McCain has his way, many more would very likely start buying insurance on their own. The presumptive Republican nominee has proposed eliminating the tax break that employees currently get on their health insurance benefits and instead giving people a tax credit of $2,500 for individuals and $5,000 for families to put toward buying coverage. I also wrote today about the presidential candidates' healthcare reform proposals.
Many policy analysts see merits to the restructuring that McCain proposes, but they argue that without better regulation of the individual market, people who are older or sick won't be able to get affordable coverage, or any coverage at all. They point to what's going on in California as an example of the kind of problems that can occur. "Look at the rescission mess in California," said health policy analyst Robert Laszewski, when I interviewed him for the election health reform piece. "The Democratic nominee will stand up and say, 'John McCain will throw you to the market wolves.' " McCain is expected to elaborate on his healthcare reform proposal at the end of April. Maybe at that time he'll offer details about how he plans to protect consumers from predatory insurance practices.
As for this rescission mess, I'd like to hear from people who've experienced problems similar to what's occurring in California. Is this just a left coast phenomenon, or is it happening elsewhere, too?
Tags: California | healthcare | health insurance
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Reader Comments
Health Care Costs
It would seem that if all the people who are maligning health care insurance companies should invest in stock in these insurance companies and make a bundle of money. I am sorry but there is so much fraud on the part of people who want something for nothing and medical providers who overcharge and commint fraud. I see ads every day like the companies who promise they will deliver an electric cart and not to worry becuase if they cannnot get an insurance company to pay for it they will give it to you for nothing. And, then there are the ambulance chasers who pander to the shady side of many who also run the costs up. If anyone thinks that health insurance is so lucrative he/she should start his/her own company. Or, let the government pay for it. These people don't know they are the government. Unless, of course, they cheat on their taxes too and expect honest people to pick up the tab. We now have three U.S. Senators who have had ample opportunity to fix the problem. Let's see the fixes that any one of them has made. Zilch! Nada! But, they can speak against the "government," conveniently forrgetting that they have been running the "government."
McCain and health care
I though Sen McCain was an honorable man. NO MORE. All he wants to do is destroy group health coverage, which cannot be denied for existing conditions, so the companies do not have to pay.
And when you look at the cost of medical insurance, the $2500 credit is like nothing. When I retired at 57, one of my options was converting my group health insurance to private, for which they wanted $30,000 per year.
And now at 68, my health insurance under medicare costs me $3400/year, and only because the govt subsidizes the hospital portion almost totally.
So McCain is just another tool of the super-rich, who would destroy the middle class for the profits of big business which has bought lock, stock and barrel the republican party.
Sorry, McCain, not a chance. You appear to just be a part of the Republican party which whose god is named Greed. And to think I voted for them all my life until I saw through GWB. One would also think Mr. McCain, that given what you endured in North Vietnam for years and years as a prisoner, you would stand up against gthe republican party and the idiotic criminal war based on mis-information and lies, thanks to GWB. What's the matter - the money from the military industrial complex to your party has corrupted you also?
Cancelled policy
My coverage was canceled by one company. None would extend coverage. I went on a Colorado state covered plan for 6 months. Nothing was wrong. I had responded honestly. The denying company interpreted some test as an omission on my part.
Six months later, I faxed all the papers from the hospital to another national insurance company which has provided coverage for 4 years.
First the scare of being "not covered" is overwhelming, second, the outrage of being told you are lying angers you, last, the time and expense to go through the search for someone to provide coverage is stressful.
We should be thriving for a better system, and we are.
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