The Los Angeles Times reports that Health Net Inc., one of California’s largest insurers, “avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies between 2000 and 2006.” Its senior analyst in charge of cancellations, Barbara Fowler, made $20,000 in bonuses during that period for meeting cancellation goals. We hope for her family’s health that she uses that extra money to buy insurance from a better company than Health Net.
The article says the practice of canceling policies after expensive medical claims is “industry-wide but long-hidden,” and we’re glad they were able to produce some hard evidence that it does indeed happen.
The documents that showed Health Net’s bonus program were made public during a lawsuit brought about by a woman whose Health Net policy was canceled while she was in the middle of chemotherapy treatments. Health Net sought to keep the documents private, “arguing that they contained proprietary information and could embarrass the company.”
Although “state law forbids insurance companies from tying any compensation for claims reviewers to their claims decisions,” Health Net has argued that Ms. Fowler is an underwriter, and therefore not covered under the law.
“Health insurer tied bonuses to dropping sick policyholders” [Los Angeles Times]
(Photo: Getty)
More From Consumerist
-
12.8 Million Americans To Get Health Insurance Rebates
-
UnitedHealth Pledges To Keep Reform Provisions Even If Supreme Court Says It Doesn’t Have To
-
Many Insurers Changing Prescription Categories So Customers Pay More For Already Expensive Meds
-
Study: 20,000 Trips To The Emergency Room In 2011 Linked To Consumption Of Energy Drinks
-
Wide Array Of Women's Health Care Costs Must Be Covered By New Insurance Plans As Of Today
Universal health care is coming to the US. I’d say it will take another 15 years (worst case) but it will be there. The average person faces so much risk if they happen to acquire a serious disease.
Oh and the USA pays more and gets less than any other industrialized country. All the other advanced economies of the world seem to be able to pass universal coverage, why not US?
I live in MA. While the new system has its flaws, it did allow my hubby to buy a policy to cover him while he gets his MBA. This is good, because I couldn’t afford my employer’s “family plan” as it was ridiculously expensive. The MA plans are state regulated and have no allowance for random and arbitrary exclusions. Anyone is eligible. And no, we aren’t on a subsidized plan, we’re paying the cost ourselves. There’s a large deductible in the unlikely event he gets sick, but we have savings. It’s the “catastrophic coverage” that is most needed.
Okay, so XTC46 may be going a little bit overboard with the whole anti-Universal Health Care thing. But the problem with the system is that health care is TOO EXPENSIVE. If it weren’t too expensive, everyone would have it. So enacting Universal Health Care is the truest definition of treating the symptom, not the disease.
The libertarian in me believes in the competitive ideal, privatizing health care, and all that jazz. But we’re half-assing it here. Insurance companies can cancel people if they don’t think they will earn them profits. But hospitals can’t. So what does that mean? That person still receives health care, and the cost is still absorbed by the system. Until we are willing to turn people away en masse and let people die so that businesses can make their own decisions, we will never achieve that level of efficiency we are looking for.
And therein lies the problem. The entire argument for privatizing health care lies in the fact that it would inevitably be far more efficient than a government-run system. But we’ve crippled the private system with various governmental interventions, and now it can never reach that peak of efficiency that we’re looking for.
Is that a bad thing? No! If the private health care system DID reach its peak efficiency, health care prices would be low, low, low, and the quality of health care would be poor, poor, poor. How is this any different or better than if we enacted Universal Health Care? Low prices, low quality.
The point of my previous post is this: We aren’t going to get anywhere by trying to operate on the spectrum of “Privatized Health Care vs. Socialized Health Care.” The end result of both extremes is low prices and low quality health care.
The end goal should not be to universalize health care. The goal should be to make health care more affordable, more accessible, and of higher quality. Don’t think socializing the system is the answer. The answer is in changing the system, separating the proverbial wheat from the chaff, and excising all the unnecessary factors that drive up the cost of health care.
Where to start? I’ll be the first one to say it: Retail Pharmacy.
France has the #1 healthcare system in the world. Please explain how this is “low quality”?
That’s the problem – health insurance is a business not a human right. BTW I think it’s neat the aticle exposes the name of the person in charge of the cancellation program. I wonder how much blood is on her hands?
@Hambriq: I absolutely agree. Fixing the system is the real solution. Universal health care will still be just as expensive and restrictive if we don’t deal with the costs.
@MsClear:
How can you even make a statement like that? First of all, you don’t provide any proof or evidence for your claim. Second of all, even if you did, “ranking” countries’ health care systems is silly, because it’s totally subjective. Sure, France has one of the highest accessibility rates for health care in the world. But the United States performs far more life saving surgeries per capita and has a much higher number of doctors and health care centers per capita than France. Does this mean one is clearly better than the other? No. And even if it did, that wouldn’t be very helpful to us because we have a different culture, different society, and a different set of health care concerns than France.
See, what really burns me up about these kinds of comparisons is that it’s exactly this kind of black-and-white, “you’re either with us or against us”, ignorant refusal to accept a progressive point of view that’s preventing us from enacting any real change to the system. Why does everything have to fall under the umbrella of privatization vs. socialization? It doesn’t. We as a society don’t benefit from that battle. Politicians and money changers do.
I do consider the World Health Organization as a credible source. France’s #1 ranking is hardly a secret.
[www.photius.com]
You can find mentions of this ranking in innumerable publications with a simple Google search, just as I pulled one up for you in seconds.
You stated that socialized medicine lead to poor quality care, without backing it up with any more facts than I initially posted.
Summary :
HealthNet = Evil Bloodsuckers who needs to be put out of misery
XTC46 = intellectually challenged (Yes I can’t expect Kia to be as good as a BMW but I do expect it to not be a death trap).
@CumaeanSibyl: best way i’ve ever heard it put.
please dont forget to add that the US has the highest rate of obesity (linked to many long term, chronic diseases) as well as diabetes (I think). We also give CTs and MRIs out like candy, and have no problem giving rotator cuff replacements to someone who is 70 years old, and consult multiple specialists and docs for one problem. We also blow most of that money on admin costs. Thats why we spend the most amount of money.
If you want to save money, dont cover everyone. Thats just asking the governemt to ruin everything by lowering costs. If you think Healthcare will get the same kind of funding the military does…or want George Bush and the DMV in charge of your healthcare… you are crazy. I’d rather have a google or apple, or even MS any day.
Heres how to fix the system:
1. Universal Health care bill form: this will save doctor and hospitals much time and money.
2. Regulate insurance companies.
3. National Care Guidelines decided by doctors and some way for consumers to have independent recourse against an insurance company for unfair practice
4. Cap insurance company profit.If they behave, they can increase their profit.
5. Insurance companies are taxed depending on how many people are not insured. Or maybe the more satisfied customers they have the more profit they are allowed. Now they have an interest in insuring people, just like people have an interest in getting insured.
6. let docs make more decisions without fear of being sued all the time so time and money is not wasted on lost causes and CYA tests. Also increase preventative medicine education with the public, since this saves a lot of money
To everyone who wants universal coverage: ask YOUR doctor if they are for or against, and why. Most are against because it will put them in the poorhouse while increasing the workload and tying their hands. Also, ask why they dont run a medicare only practice since you think government healthcare is so great.
Other countries may have better systems in general, but we have the best, hands down for the rich. Bring costs down, efficiency up, and corruption out, and most other people will have the same access.
It ought to be federal law that if they cancel someone due to them providing bad info, they have to refund all the money they paid in, plus the interest. Its sick that they keep taking the money until they realize they are sick, then they try to remove the service.
href=”#c2937767″>redkamel: FYI. State Farm insurance is a mutual company. Any profits they have gets sent back to the policy holders.
Some complain about the 47 million uninsured, but 10 million of those are illegal immigrants and shouldn’t be here anyway, and the other 2/3rds are able to afford it (barely) but have made a decision not to have it. According to John Stossell anyway.
Don’t quote me on this, but I recall a co-worker of mine telling me his father’s health coverage was canceled. They quickly found a new provider since his company offers (has to provide health insurance by company policy) many health insurance providers. He said they all [providers] have limits in their policies, but many people don’t know about them or read the fine print. He said his father’s was canceled after his total medical bills hit 10 million dollars. This was in Massachusetts.
I know everyone is knocking on insurance companies here, but is anyone out there have any info on real limits?
@MsClear:
Thank you for at least providing some proof. Now, kindly refer to statements #2, #3, and #4 from my previous post.
#2. Ranking countries’ health care systems is pointless because there are far too many subjective factors in doing so. To wit, I have to call into question the relevance of any study that ranks Malta, Singapore and Andorra significantly higher than Canada, England and the United States.
#3. Even if we were to objectively state that France has the best health care system in the world, that does very little to help model how we should do things. We have a completely different set of health care needs. For one, we spend exponentially more than France does on health care. That’s what’s causing this crisis in the first place. You can blame it on fat Americans all you like, but until we’re willing to let fat people die in order to prove a point, it’s a reality we are going to have to deal with. If we were spending as much on health care as France was, there wouldn’t be headlines like this on Consumerist. So the analogy really serves no purpose.
#4. Again. Why does it have to be a constant battle between socialization vs. privatization? We as a society don’t benefit from that whatsoever. We have to think a little bit beyond our narrow political lines to get things done here.
@jeffjohnvol:
This is true. But at the same time, it’s kind of irrelevant. If we just look at the facts of the situation, we are providing these people with health care regardless of whether or not they have coverage. So when it comes down to it, someone is footing the bill. Most of the time, it’s absorbed by the system, and we all end up paying for it. Kind of like socialized health care.
Because we aren’t willing to not provide health care to people who don’t have health insurance, we’ve basically forced socialized medicine on ourselves via our own consciences. This isn’t a good thing or a bad things, it’s just the way things are. To me, most of it comes down to dollars and cents because that’s what is causing this whole crisis in the first place. In almost every case, it would cost less to provide these people with health care coverage before the fact than for the costs to be absorbed by the system after the fact, especially when you factor in the savings associated with preventative medicine.
@Hambriq: I accept your first argument, but the last one is way too idealist and unrealistic for me to accept. If you have socialist healthcare then companies will stop providing it and we’ll depend on the government for everything, and your taxes will double.
The best solution in my opinion is to do like Massechussets (sp?) did. Make it a requirement to have it, and provide assistance to those at the very bottom who can’t afford it. Too many 30 somethings go without it even though they could afford it. Every state should make it a requirement to work, just like most states make it a requirement to have car insurance if you are going to drive.
@jeffjohnvol: Please ”taxes will double”. Right now USA spends MORE per person on healthcare then Canada. And Canada has universal health care paid by taxes. If USA gouvernment stops waisting money, they will be able to afford social health care with what they spend alredy.
@jeffjohnvol: If you have socialist healthcare then companies will stop providing it and we’ll depend on the government for everything, and your taxes will double.
Well, firstly, I don’t think that we should have socialized health care for the exact reasons you mentioned. The point I was making is that we are still spending the money regardless of where it comes from. It could come from the government, it could come in the form of higher premiums, it could come in the form of a lot of things. But we’re still footing the bill.
Rather than just spread the costs around (which would happen if we completely socialized our health care system), we should enact reforms in order to decrease our costs on the whole. Some of those steps would inevitably require an amount of socialization. But I don’t think socializing the entire process will help the matter. In the end, I think you and I are really on the same page here.
@Hambriq: ok, point taken. I think we are on the same page as well. IMO, part of the problem is that everyone that wants socialized medicine wants it for free. And honestly, when you figure most Americans would buy a chinese shirt that costs 13 cents less than an American one, will they really tolerate the tax increases, because someone is going to have to pay for it. I don’t think its fair that I have to pay 7K a year for my family’s insurance and then pay more taxes for those that don’t even shop for for insurance.
I think requiring insurance of everyone would do as you say, to decrease the cost on the whole. Normally, I think of socialization implying the gov’t take care of things, I’d rather use the gov’t to force people to be responsible and help those that are below the poverty line.
It sucks that the person can’t be prosecuted because she was an underwriter, whatever that means.
Why the hell does an insurance company have a quota for cancellations of policies? Who can possibly bear the guilt that must come from taking away people’s healthcare coverage and therefore their security, money and their lives just because it saves your company some money?
@jeffjohnvol:
Yes, excellent idea.
That way, the insurance companies can charge ridiculous amounts of money for health insurance, like they do car insurance, in the states that require everyone to have it.
More importantly, we can then lock people up for not having it, even though they can’t afford it and the government fails to provide appropriate amounts of cash for relief.
My parents have to keep extremely close watch on their health insurance premiums, because my mother has Hep-C, from a bad blood transfusion ages ago, even though she’s been negative for several years, and despite the fact that the insurance company didn’t have to cover any of her drug costs because she obtained her medicine through some program or another.
Insurance was costing them ~$200/month for her to be on his insurance at work. Then it jumped up to ~$300, and they had to look elsewhere – private insurance isn’t much cheaper.
Her new carrier just decided out of nowhere that they weren’t going to cover an eye infection (several doctor’s visits, etc), and they’ve (parents) been discussing it with the insurance commissioner’s office. They can’t actually afford to pay for a lawsuit, if it comes to that.
There are millions of people just like them. Is the government going to cover the $500+ premiums for a family of four that is barely making ends meet with both parents working, due to one of the kids having a serious illness? Is the government going to pay for the lawsuit necessary when the insurance company decides they no longer want to pay?
State governments can barely afford to pay assistance for *just* children. What makes you, or anyone else, think they can afford to pay even part of the ridiculous costs of health insurance for families?
The problem in this country is that health care providers charge far too much for services, and insurance companies charge far too much for coverage. Just look at England – health costs are very low, and that’s with the government paying. Prescription drug costs are very low, and that’s with the government paying most of the cost. All this despite the fact that it costs *more* to live in most parts of England than it does in the US. Yet physicians in England seem to have no complaints – they get less than half what our physicians charge, have a higher cost of living, and *can’t complain*? They get less than our physicians and yet make *fewer medical mistakes*?
Something is wrong. Socialized health care isn’t necessarily the solution – the high cost regulation of socialized medicine is. The health care system will rail against it, of course, with sob stories about how a cardiologist will no longer be able to afford the insurance on his Enzo, but they’re not going to control costs themselves – that much is obvious.
@Hambriq:
Oh, and we don’t have a “different set of health care concerns” than any other first-world nation. If anything, we have a smaller subset of health care concerns compared to Europe, as the EU has more porous borders and more third-world immigrants and travelers who carry with them worse health problems than “too fat” or “smoked twelve packs a day.”
@RvLeshrac: 300/month for insurance is a steal these days. My tab is $750/month with dental.
Insurance isn’t healthcare. Insurance is a gamble that if you suffer a horrible disease, the insurance will help defer the costs. Insurance is NOT an inexpensive source of healthcare. Ironically, part of the reason healthcare is so high is becuase of insurance that pays $3k a night for a hospital bed. If the free market were at work, it would be much less.
Lock people up, no. But why should I have to pay for YOUR health insurance or vice versa. Hell, add a big tax to everyone that earns a paycheck and defer it with a credit if they have proof of insurance. Free markets would keep costs down if all have it. Its not an Owellian conspiracy that all (ins co’s) would charge tons of money because of a captured market. And your argument about car insurance companies raising their prices because they have a captured market is false on its face.
Why do people in this country think they are ENTITLED to inexpensive healthcare. Its not a right, but a service you have to pay for. Maybe bring in hospitals from India for some competition. England takes 75% of your income and there’s a 2 month waiting list for any doctor. Do you really want that? Then move to the UK or Canada.
@RvLeshrac: I basically agree with your point is that there should be methods employed to reduce the costs.
One good way I can think of is to put in clinics in all of the WalMarts to let them do the simple visits to get an antibiotic. It amazes me how good that company is at reducing costs. Because I think a large part of healthcare costs are a simple Dr visit to get an antibiotic, especially mothers that drag their kids in for any sniffle.
Another is to limit pain and suffering payments from medical lawsuits to 100,000. And put retired judges on juries instead of the brainless collection they always seem to find (e.g. McD’s coffee verdict). Yeah, if a guy screws up and kills someone they deserve some money, but a 45 million payout gets passed on to US, not the Dr or the insurance company.
Also, either eliminate the illegal immigrant problem by having them go home or having their employers pay for their medical expenses.
@jeffjohnvol: Why do people in this country think they are ENTITLED to inexpensive healthcare. Its not a right, but a service you have to pay for.
I think we have tacitly decided as a country that people ARE entitled to health care. As an example; hospitals can’t turn away people based on their insurance coverage. We can never have a free market in this country until we remove all the barriers to its operation. Which, ultimately, means giving businesses the power to let people die in order to make a profit.
Sound dramatic? Wait until the politicians get ahold of it. While completely privatizing and decentralizing health care may be sound in theory, but doesn’t really have a place in the discussion about how to fix our problem, simply because it’s just not a realistic option. I’m not saying I would be against it, but it’s just one of those things that could never actually happen.
Even if it did, I question the ramifications it would have on our health care, but I addressed that in an earlier post, so no need to be redundant. But I think you’ve got the right ideas. Streamlining the process (like your Wal Mart idea) is integral. As is massive tort reform.
Ultimately, the end goal of dealing with the problem should be reducing the costs of health care without sacrificing its quality. The first step to that is cutting out the wasteful spending and unnecessary burdens to the system.
@Hambriq: All good points. One way I could see saving money would be to have a contracted nurse that has an examination room at local pharmacies. With the insurance company employed GP, the nurse would do tests that the doc asks, while over a video conference terminal. Any scopes (ear thingy) could be piped through the camera and the stethoscope can be transmitted as audio. 90% of the time the doc would prescribe an antibiotic, or refer them to a local GP and/or specialist.
The contracted nurse would be an agent of whichever insurance carrier you use.
I think this would save the company a lot of money since there wouldn’t need to be a $400 cost to the GP everytime you get a sinus infection. The pharmacy would benefit because they would get a fee from the insurance carrier and could sell the prescription right there.