California To Fight Health Insurance Rescissions?

The LA Times is reporting that California Insurance Commissioner Steve Poizner will reveal new regulations aimed at stopping a controversial health insurance practice in which customers with costly illnesses are retroactively dropped.

The practice, known as “rescission,” is explained in this Q&A from Frontline with Karen Pollitz, a research professor at Georgetown University who studies health care finance:

How does this work?

[It works] particularly in underwritten policies, particularly where you had to show eligibility to get into a policy. It happens most in the individual insurance market, but it can happen in group policies as well.

Once you make a big claim, particularly in the first year or two of coverage, there’s an incentive for the insurer to go back and investigate and see, is there any reason why you shouldn’t have been in this policy in the first place? Maybe the claim is for a brain tumor, and the insurer can go back and comb through your records and realize: “Oh! Six months before you bought this policy, you complained to the doctor that you were having headaches. That’s a symptom. This was pre-existing. Had I known you had a brain tumor when I sold you the policy, I wouldn’t have sold you the policy, and so I’m taking it back, and I won’t be paying the claim”; or, “I’ll declare that this tumor was pre-existing. You can keep the policy, but I won’t pay the claims related to your pre-existing condition.”

Or they may find out you weren’t eligible. I heard a story once about somebody who made a claim for their child, and she was remarried. Her husband was not the child’s father, and the policy that he had through work didn’t cover stepchildren. And no one had really asked about child/stepchild when they applied, and they were perfectly happy to get the premiums while nobody was making claims, but once the kid got sick, this got investigated, and retroactively he was taken off the policy.

According to the LA Times the new regulations would :

  • Require insurers to write applications for coverage in plain English
  • Allow applicants a “not sure” answer to questions about their preexisting medical conditions
  • Bar insurers from dropping someone if the companies failed to thoroughly investigate an applicant’s medical history before issuing a policy.
  • Bar a cancellation if the patient was unaware of the medical information being sought on the application or failed to appreciate its significance.

For more info about rescission check out this episode of Frontline.

Proposal would combat rescissions of health insurance policies in California [LA Times]
(Photo:kath-leen)

Comments

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  1. Cant_stop_the_rock says:

    I generally hate California’s needlessly overprotective laws, but I think this is appropriate.

  2. GreatWhiteNorth says:

    Fantastic… We must all be tired of hearing about this form of customer abuse by insurance corporations… It is of course bullsh*t.

    Show us the way California… well on this issue at least.

  3. Featherstonehaugh says:

    You should at least get your premium refunded if you are dropped…

    • TheBursar says:

      @Featherstonehaugh: That is not enough. Even if you paid $20,000 in premiums for a over few years, they would still drop you if you needed a +100K operation for instance if all that was required was to return the premiums.
      What CA is trying to prevent is insurance corporations retroactively nullifying a contract at it’s convenience.

      • zyodei says:

        @TheBursar: That’s kind of life a fire insurance company saying “sorry your house burned down, we don’t feel like covering it. Don’t worry, here’s your premiums back.”

  4. pecan 3.14159265 says:

    I’m glad for this because insurance companies are daunting, and they’re controlling. If no one speaks up, and if no one with authority can do anything about this, the insurance companies will drop people who made the claims to get medical care coverage (exactly what insurance is meant for) and get denied and dropped because the companies want to find a loophole.

    • pecan 3.14159265 says:

      @pecan 3.14159265: *and people will get denied and dropped…

      Sigh. Edit button, please. And more coffee.

    • bohemian says:

      @pecan 3.14159265: A previous group policy we had started investigating every single doctor visit as a potential pre-existing condition after both of us had some minor medical issues. I was wasting enough time every month to qualify as a part time job dealing with this insurance company for the six months of the pre-existing window. This is nothing compared to people who have these individual policies. They get sick and someone at the insurance company pulls one of these rescissions even if there is no merit to it. The last thing someone needs when they are fighting cancer is to be getting screwed by their insurance company.

      The lack of oversight and regulation on the health insurance industry is downright criminal.

      • kaceetheconsumer says:

        @bohemian: When I first moved to the US from Canada, it was the monetary side of health care that bugged me. But now with nine years’ worth of experience with a variety of HMOs and PPOs, I realize that what’s so much worse than the financial aspect is the stress that comes from constant insecurity about coverage.

        Even when I’m reasonably healthy, having to worry about what’s covered, what’s not, where deductible applies or not, changes to premiums or policies, which providers are truly in system or not and has it changed again since the PPO bothered to update it’s website list, what third parties come into play without my knowledge and suddenly add on extra fees, retroactive denials, etc…and then having to fight here and there to get thing fixed with the billing errors…holy crap on a stick I’m exhausted and I don’t even have cancer or AIDS.

        I know it’s popular to loathe government bureaucracy but no DMV trip has come close to the stress and hassle of tackling even a basic billing error by health insurance. Give me a single government bureaucrat any day over having to call four different entities over one billing issue and have each entity simply point to another one!

    • ThinkerTDM says:

      @pecan 3.14159265: For once I agree with you.

  5. 1stMarDiv says:

    Sounds too good to be true, but I hope it works.

  6. bonzombiekitty says:

    I can see an insurance provider dropping coverage if a given condition was known to exist when the insurance was bought and never brought to the insurers attention. For example, I get diagnosed with cancer, then go buy insurance – knowing that the insurer won’t cover me if they know I have cancer, I don’t provide any information about the condition. Then after I get the coverage and then go in for treatment, the insurer finds out that I withheld information. That’s an understandable reason for rescission.

    However, combing through your records to find anything that MAY have been a symptom of your disease and there’s no diagnosis of it is not a good reason for rescission.

    • crashfrog says:

      @bonzombiekitty: I get diagnosed with cancer, then go buy insurance – knowing that the insurer won’t cover me if they know I have cancer

      Let me just stop you right there. Is that how you think it should work? That you shouldn’t be able to get health coverage – and therefore healthcare – if you have cancer?

      Don’t you think the people with cancer are precisely the people who should be getting healthcare?

      • xenth says:

        @crashfrog: Sure, but they should not be getting insurance to pay for the cancer AFTER being diagnosed with an ailment.

      • Powerlurker says:

        @crashfrog:

        This is a problem with any insurance based healthcare system. In any pool of people, there will be some uninsurable risks. The whole purpose of insurance is to protect from unknown risks and unexpected occurrences, and tends to work best when the chance of an insurable event is low, but the cost of such is high. No responsible underwriter should approve a policy to cover preexisting chronic conditions because the premiums they’d need to charge would be equal to the expected out of pocket costs anyway.

        For an oversimplified explanation of why this is the case, let’s assume we have a specified cohort and let’s call them “unmarried men, age 18-25″ and let’s assume that we’re insuring their cars. Actuaries will look at this cohort and see what the average likelyhood of an accident is and what the average cost of an accident will be. Ignoring interest on the float and a number of other factors, we can look at the simplified Econ 101 actuarial formula that the cost of premiums should be equal to the risk of an event times the cost or P=R*C. If each member of our cohort has a 1% risk of getting into an accident each year with an average cost of $10000, then P=.01*10000 giving us premiums of $100 per year or something reasonably manageable.

        The problem arises when the probability of an insurable event approaches 100%. So let’s take another cohort called “cancer sufferers” that will in the next year with almost 100% certainty require, on average, $50,000 of medical treatment over the next year to treat their condition, now the premium you’d need to charge the members of this cohort would be equal to the $50,000 they’d have to have paid out of pocket anyway.

        This is why any serious healthcare reform will have to do it outside of the paradigm of insurance or have some sort of insurer of last resort or assigned risk system to allow the uninsurables to obtain the healthcare they need.

        • jmujeff says:

          @Powerlurker: And on top of all that, the medical industry itself needs a giant reboot. The costs of some drugs, treatments and doctors are completely ridiculous.

          I’ve stated it a million times in these medical related threads, but when I’m picking up $1,000 “generic” prescriptions for anti-nausea pills, paying $400 to see a doc for 15 minutes and paying $20 for a plastic shim that holds my wife’s I.V. line to her arm, there’s something wrong there.

          • crashfrog says:

            @jmujeff: You’re paying those prices to subsidize the lower prices of those medications and supplies to people in other countries on single-payer health care.

            You know, and also to subsidize medical advertising so that people with no medical training at all will tell their doctors what pills they need to take. Go figure.

  7. Saboth says:

    This should be addressed at the federal level now. Having a headache doesn’t mean you know you have a brain tumor. Now, if the doctor told you that you have a tumor, and you chose not to tell the insurance agency, that is another matter.

    “I see you had the sniffles in 6th grade…you probably had AIDS back then too, so we are going to have to ask you to pay up for every claim since then.”

  8. JGKojak says:

    It’s the insurance companies responsibility to assess you prior to your enrolling with them. Once they give you the green light, its THEIR FAULT they failed to thoroughly investigate any medical conditions you made. Or how about this- they can’t deny coverage for ANY pre-existing condition.

    • sleze69 says:

      @JGKojak: Remember that they are not a public service, they are a business. Would YOU insure someone paying $300 a month in premiums to cover their $10,000/month drug treatment bill?

      Their business model is based on the healthy paying for the sick and if you force them to cover pre-existing conditions, everyone would just drop their insurance and get a new policy when they find out they are sick.

    • ilves says:

      @JGKojak:

      Unless the applicant outright lies on the application, then its valid. Also, making people mandatorily be insured with a pre-existing condition would raise premiums through the roof for everyone

  9. Trai_Dep says:

    Oh, California, the shining beacon to the other 49 states (well, I suppose those Cuomo and Spitzer characters on the East Coast rank, as well) for Consumer Protection goody-two-shoesness.
    If only we could deport our paleo-Conservatives to say, Mississippi, where they belong, and we’d truly be The Golden State.

    PS: Dude – want some bud?

    • floraposte says:

      @Trai_Dep: Actually, Illinois’ Lisa Madigan is no slouch in this area either. But no, she couldn’t protect us from Blagojevich.

  10. Trai_Dep says:

    I’d also like to see an “artificially induce whatever life-threatening illness the consumer has to the insurance executive and his entire family then declare it a pre-existing condition after dumping their health insurance to see how they like them apples” to the bill.
    But I’m a foolishly romantic optimist.

  11. Propaniac says:

    Regardless of all the other issues here, an insurance policy that covers children but not stepchildren is pretty gross.

    • msbask says:

      Why? The child isn’t a legal dependent of a step-parent.

      • nakedscience says:

        @msbask: Uh. Yeah. Step-children can be and usually ARE legal dependants of step-parents.

      • trujunglist says:

        @msbask:

        The child is almost definitely a legal dependent, especially if it’s claimed as so on tax forms and what not. I think the issue is that the man probably did not officially adopt the child – something which very few people actually wind up doing in that kind of situation, because it’s just assumed that the kid is now essentially their kid too.
        The fact that the insurance company denied the claim is, quite frankly, ridiculous. They took an every day thing and made it into a “special case,” when we all know the reality is that this is completely normal to 99.9% of society and is in fact standard operating procedure in this type of situation.

    • Rectilinear Propagation says:

      @Propaniac: I agree with this comment.

      It makes no sense except at all except as a random, jerky way to deny a claim.

    • kaceetheconsumer says:

      @Propaniac: it’s similar to how many states do not require insurance to cover adopted children (or at least that was the case when we considered adoption about six years ago). So if a woman has a baby with a disability her insurance has to cover that, but if she adopts a disabled child she could be told that that’s a ore existing condition and not covered, even to the point of full denial of coverage.

      It’s a sick and inhumane system.

  12. mattwiggins says:

    I seriously don’t understand how you americans put up with this kind of bullshit.

    • mattwiggins says:

      @mattwiggins:

      … from insurance companies, I mean.

      • dfwguy says:

        @mattwiggins:
        Actually we try not to put up with it, but the companies have lobbied to get rid of any government organization that could mediate. Eventually you realize that you are fighting a machine which never tires and cannot be unplugged. At that point you have learned to love big business and succumb.

      • bohemian says:

        @mattwiggins: I waste way too much air trying to point out to people how flawed our system is and that other countries do make national health systems work.

        The thing that really wakes some people up to the propaganda they have been fed is a big medical problem or chronic illness. Once they get to experience the US medical system and what a scam for profit insurance is they wake up quite quick.

      • youbastid says:

        @dfwguy: Not to mention a populace that’s been brainwashed into believing that single payer healthcare = nazi germany.

        • SadSam says:

          @youbastid:

          Yup, the insurance companies have recently rolled out the scare ads here in Fla. You think Europe’s national health care is so great, well this person died while waiting for xyz procedure. I with those ads would document the number of deaths of Americans due to the fact that they have no health insurance and therefore limited access or zero access to life saving treatment.

          Certain things, health care, education, police/fire should be provided for all via tax dollars.

          • youbastid says:

            @SadSam: Agreed. I would like to see a commercial depicting what fully privatized police, fire, and education would look like, and asking the question, why would you want the same rules to apply to your health?

        • ShruggingGalt says:

          @youbastid: While normally I’m a proponent of the free markets (truely free, which America hasn’t been in 100 years), health insurance is an interesting animal. This is insurance for something that will probably be used, unlike home insurance (used to be called fire), or even auto insurance, which may be used but not that often….almost like whole life insurance. I believe that the best way would be a change to like single payer with catastrophic-only coverage, but people have to be forced to pay for routine office visits so that the abusers of the system (and if doctor’s visits are free or only $5 in the case of CHIP) will be discouraged from overusing the services so doctors would have to compete on price and quality of care, not just “because he/she is in network”.

          The government can’t solve everything. For one year due to my economic situation I qualified for CHIP in California (thanks to their average income level); they have rules that all kids in the same family have to be enrolled in the same plan. I submitted the application before my daughter was born, and they approved it. Right after she was born we wanted to change plans, which we had the right to do. The government changed my son’s plan but not my daughter’s. So, I had to pay for her office visits out of pocket because our doctor for her wasn’t in the old network. After fighting the state for months, her coverage gets retroactively canceled from the first plan, and not-retroactively instated by the correct (new) plan, so technically, for about 3 months, she was uninsured by CHIP. Wrote an appeal to the Board; it took ONE year for them to hear my case, and agree that the State screwed up and to reimburse me for the doctors visits. Fortunately she didn’t have anything else major, because they wrote the reimbursement check to the doctor, not to me!

          So I don’t trust the government to deliver quality insurance. But a single-payer style system is the way to go.

          • HiPwr says:

            @ShruggingGalt: I’ll beat someone to it: you are a Rush listener and everything you say is bullshit. I’m not listening, I’m not listening, na, na, na, na . . . .

      • greyer says:

        @mattwiggins: What?!? Anything else is… is… *COMMUNISM*!

    • Rectilinear Propagation says:

      @mattwiggins: I believe the term is “learned helplessness”. They teach it in schools. There was even a Consumerist article on it a while back: [consumerist.com]

    • H3ion says:

      @mattwiggins: Health insurance, like all other insurance, is on a state by state basis. There’s a rush to the bottom among some states to see who can be the most industry friendly so insurance carriers will domicile and pay taxes to that state. That doesn’t make it right but that’s the federal system. Example, a company has offices in Virginia and Maryland. It’s employees live in Maryland, Virginia, DC and West Virginia. Virginia mandates fertility treatment coverage which is very expensive. Maryland does not. The company may choose to select either Virginia or Maryland as its base of operations (assume relatively equal numbers of employees). Its premiums will be lower if it chooses Maryland solely because of the mandates. Is that fair? Probably not but businesses have to make that choice every day.

      Even if California adopts the proposal, there will still be grounds for termination if the insured fails to disclose a condition he either knew about or should have known about with reasonable care. But the proposal will do something to level the playing field and that can’t but help.

    • H3ion says:

      @mattwiggins: Government insurance is probably not Nirvana either. In England, emergency care is excellent and immediate. Non-emergency care (like a knee operation) can take years. That’s one reason why private health insurance is making substantial inroads in England. (It’s a perk for many corporate jobs.) I can’t speak for Canada but I know that a client who operated imaging centers in north New York had loads of patients come over the border and pay full freight in cash just to avoid the queues in Canada. Where do you think the system is perfect, or if not perfect, at least closer?

  13. Snarkysnake says:

    I agree with the other posters here that say that this is overdue at the federal level. This is bad faith insurance , pure and simple. Think about it : If some bean counter recinds coverage by combing through your records for “symptoms” of what they are trying to deny , then that bean counter is practicing medicine without a license by diagnosing what you MAY have had. Unless the son of a bitch has a time machine and a medical degree , he doesnt know what he is talking about.The burden of proof should fall on the insurer to prove fraud in a court of law. They should give you a thorough exam prior to coverage.

    • bohemian says:

      @Snarkysnake: They just hire a few C or D average in medical school doctors to rubber stamp their “plan”. Everyone who graduates medical school gets to be a doctor, the one who got straight A’s and the one who barely passed.

      • Snarkysnake says:

        @bohemian:

        4 Words then.

        Contingency fee malpractice attoney.

        The point being that someone should be making the decisions that is accountable.

  14. Shoelace says:

    The new regulations sound great but I’m concerned that the insurance companies will find ways to circumvent; e.g., questionaires that are a mile long and exclusions of major (generally costly) illnesses from coverage based on ‘evaluation’ of applicant’s answers and known health histories. The rates for group plans, generally exempt from individual underwriting, will go up.

    In my experience the insurance companies regularly deny routine health claims, forcing the consumer to make repeated phone calls, submit additional paperwork, and keep detailed records of the entire process. When the customer gets tired of it and gives up (which I believe happens very often), the insurance company gets to keep the money. It would be nice if something could also be done to eliminate or at least decrease that practice.

    • Trai_Dep says:

      @Shoelace: Yup. It’s part of their business model. Make doctors and patients burn thru enough countless, frustrating hours to get insurers to do what they’re obligated to do until some of them give up.
      But hey, they’re free market private parties, so it’s freaken’ awesome! Whoo hoo!

    • bohemian says:

      @Shoelace: Huge penalties for stonewalling patient claims. I have had many people who work in clinics tell me certain insurance companies routinely “lose” most of the claims submissions they send in.

    • bishophicks says:

      @Shoelace: Single payer. If you’re a citizen, you’re covered. No bullshit denials, mountains of forms, extra phone calls or whatever. You see your doctor, he treats you, you go home, he bills the government and gets paid.

      No need for an entire industry to maintain an army of lawyers, accountants and other staff whose sole job it is to avoid paying claims. What percentage of our collective annual insurance bill goes to cover that expense? Wouldn’t it be great if we had that money to spend on treating people?

      We spend almost twice as much on healthcare as other industrialized countries and we get measurably poorer results. If other countries can provide quality care to all their citizens for 10% of GDP or less, we should be able to do likewise.

      • greyer says:

        @bishophicks: Except various officials from both major parties have publicly announced no single payer solution will even be considered. No matter a vast swath of the country considers it an optimal solution. It won’t be considered.

        • From the cubicle of PGibbons says:

          @greyer: Yup, the federal politicians have been paid off well by the selfish criminals running the “health insurance” cabal. And because the insurance cabals have bought off the Republicans and Democrats they tell us that Single Payer can’t even sit at the table upon which they carve up our ability to live or die. We are simply numbers to profit from – sick people are a “loss,” so they can “fuck off” and/or be concentrated into a government program where the taxpayers foot the bill.

          Insurance companies profit by cherry-picking the healthier population, then denying them coverage if they get sick. They serve no useful purpose other than creating and pushing paperwork then immorally siphoning off money that should be going toward healthcare for everyone. We can no longer afford their leeching – if we ever could. Single Payer is the only workable solution.

  15. Trai_Dep says:

    If only there was some sort of system that other advanced countries used that produced better outcomes at a cheaper price that included everyone in the same pool.
    That way, there’d be no financial incentive to dump sick people for the crime of getting sick.
    Gosh. If only.
    Alternately, if only we were Canadian.

    • HiPwr says:

      @Trai_Dep: “Free” healthcare doled out by bureaucrats. Yeah, that would be heaven.

      • milaround says:

        @HiPwr: @HiPwr:
        and yet it works so well.

        • HiPwr says:

          @milaround: @milaround: Sarcasm appreciated.

          • Saboth says:

            @HiPwr:

            Honestly, if I compared the government healthcare of most countries to what we have in America…many of them would be found to be better…some would be worse….and most of them would be cheaper.

            Nevermind the fact we are basically the last industrialized nation to go to nationalized healthcare…and the only reason we don’t is basically lobbies from insurance companies.

            • jeffjohnvol says:

              @Saboth: Yeah, bring on national healthcare. I’d love to pay the 70% tax rate.

              • youbastid says:

                @jeffjohnvol: On average Canadians pay lower taxes than Americans. Did Rush Limbaugh give you that 70% figure?

              • floraposte says:

                @jeffjohnvol: You really think that’s what people in Canada and Europe pay? Or you just think their countries are more efficient, and the U.S. couldn’t possibly do it as well as they do, so it would have to cost us more?

                And then we’ll get into the math where the actual tax portion going to health care gets compared to the health care costs without it, rather than apples and oranges.

                • jeffjohnvol says:

                  @floraposte: Did I say that? No I did not. If you take the current spending levels Congress is spending now, and add the healthcare costs on top of that, it would not surprise me at all if we were paying 70%. Of course, the bottom 90% of income earners (which I am part of) would insist that their taxes not go up.

                  Keep in mind that the socialists also have the VAT tax, which we don’t have.

                  • Trai_Dep says:

                    @jeffjohnvol: You realize of course, that taking what the US is spending now is atypical. We won’t have to engage in such frantic pump-priming spending to prevent the global economy from seizing up at least for as long as it will take another Republican President to screw everything up as badly as the last one did.
                    So yeah – can’t use current spending levels as typical, since we live in atypical times.

                  • cluberti says:

                    @jeffjohnvol: Yes, they have a VAT tax. It helps pay for such useless things as public transport, public works, education systems, government programs for the poor, etc. As a top 90% wage earner, I don’t want MY taxes to go up either. But I am appalled at the lack of education, dereliction of the old and the poor, and the lack of decent public transport in mid-major (and even some “major”) cities in this country. I know having a system crossing a country as large as the US would be difficult, but it is possible.

                    Socialism isn’t evil, only people are. The nazis weren’t the only socialists, just like the Russians weren’t the only communists. Democracy in this country is basically a fallacy as our republic has been sold to the highest bidder – personally, I’m all for socialism at this point.

                    • HiPwr says:

                      @cluberti: Stop the rampant government waste and then come talk to me about raising taxes. I don’t mind paying taxes when it’s not being spent on shit like Murtha’s airport.

                    • Trai_Dep says:

                      @HiPwr: So you’re not going to buy anything until rampant business waste is stopped?

                    • HiPwr says:

                      @Trai_Dep: I’ll still buy stuff. I’ll also still wear shoes.

                      What the hell are you talking about?

                    • Trai_Dep says:

                      @HiPwr: Waste is everywhere, private and public. The military’s infamous for it, yet I’d presume you’d like to see increases there.
                      Yet the only sector you say its presence is a capital offense is the one sector where other advanced economies have proven unequivocally would save us billions without impacting medical outcomes.
                      It’s a curious stance to take. (shrug)

                    • HiPwr says:

                      @Trai_Dep: It would appear that you can’t discern the difference between 1) a consumer deciding to construct a theatre room in his home and purchasing a 110″ flat screen TV from a company whose CEO is being fired after mismanaging it for years and is receiving a golden parachute and 2) a taxpayer having his money forcibly taken from him (under threat of fines and/or prison time) and it going towards a 110″ flat screen TV for the lobby of Ted Stevens’ Anchorage office.

                    • Trai_Dep says:

                      @HiPwr: So, you’re in favor of cutting the Pentagon budget by 1/3, say, until they ferret out all waste?

                    • HiPwr says:

                      @Trai_Dep: I’m in favor of not creating new entitlements or levying new taxes on Americans until measures are taken to eliminate wasteful spending. Then we can determine what we can currently afford and legitimately justify new taxes if need be.

                      Government waste has been going on for a very, very long time now and no one has stepped up and said “enough!”. Now that we have a great leader in Obama that is changing the way things are done in D.C., I think we finally have a true champion of responsible and accountable fiscal policy and I expect him to start living up to his campaign promises any second now.

              • From the cubicle of PGibbons says:

                @jeffjohnvol: Tax rate has nothing to do with it. We pay substantially MORE per person than those countries do just for healthcare, and that money doesn’t even cover everyone!

                What morals did you grow up with that proclaim that it’s more important to support the profits of a private company than it is to ensure the health of your fellow man? AND to overpay for the privilege?

            • SacraBos says:

              @Saboth: I am an not in the health or insurance industries, but I don’t want government health care either. I don’t want a fat-ass in Washington to decide what care I get, when I get it, and how long I have to wait.

              It’s a “Tragedy of the Commons” of a massive, and costly, scale.

      • From the cubicle of PGibbons says:

        @HiPwr: As opposed to “paid” healthcare doled out (and often denied by) insurance company bureaucrats? I think you are right – it WOULD be heaven.

        Somehow the government “bureaucrats” manage to deploy armies, fight forest fires, get rockets to the moon and satellites into space, etc. Say what you will about them, they could never fuck up health care delivery worse than the private profit companies in the USA have.

        That is, unless those same private interests were allowed to set up a government system to deliberately fail – which seems to be their current strategy. Meanwhile, citizens die and become sicker in service to the needs of private profit.

        • HiPwr says:

          @From the cubicle of PGibbons: I recognize that some people have real issues with quality of service from their healthcare providers. I imagine they will feel much better when everyone gets the same shitty service they get as they sit in an ambulance outside of a hospital where they are “stacking” patients like they do in the U.K.

  16. Kris123 says:

    Thank God. Thats just horrible

  17. CaptZ says:

    I see what you did there Trai_Dep.

    Good one….and I agree.

    Healthy citizens = healthy taxpayers.

  18. redskull says:

    There’s a special section in Hell for insurance providers, right next to the Hitler Wing.

    Keep up your antics, insurance companies. When enough people figure out that you can retroactively drop them and change the rules, they’ll begin to wonder why they’re bothering with insurance in the first place. Then you’ll be going the way of the newspapers.

    • bohemian says:

      @redskull: Even worse when they “un-pay” a bill with a provider months later.

      • floraposte says:

        @bohemian: They unpaid three years later, with me last month. Sounds like it’s time to open up a complaint with the attorney general’s office again.

    • youbastid says:

      @redskull: That’ll scare ‘em. They’ve got the government in their pocket and no one in their right mind that has a child would just stop “bothering” with insurance.
      These policies were well-documented in Sicko, but what can you do about it? Every time someone tries to change laws around health care they’re labeled by pundits as socialist scum.

      • From the cubicle of PGibbons says:

        @youbastid: …Which is probably why those silly labels the “bought and paid for” pundits throw about are being seen for what they are – childish propaganda by morally bankrupt interests.

        If I’m “socialist scum” to encourage a functional fire department, public works, parks, libraries, schools, health care, and other communal needs of life – then oh well. What kind of hell on earth do executives at these private companies want THEIR grandchildren to live in?

        What’s most ironic is the ones that want to destroy community the most call themselves “conservative.”

        • youbastid says:

          @From the cubicle of PGibbons: I totally agree with you, but I don’t think they’re being seen for what they are. I’ve heard more people call Obama a socialist and a tyrannical overlord than I ever heard anyone call W. a traitor, a war-monger, a puppet, etc. I’ve heard more people blame Obama for the current financial crisis than I heard anyone blaming Bush during the first 6 months of it. I’ve heard the people that said “you need to support your President no matter what or you should live somewhere else” now say they hope for the President to fail. Those bought and paid for pundits are paid well because they work.

  19. DanielleTexodus says:

    I wanted to say something sarcastic but F it. Stories like THIS ONE are why I want to throw rocks at the right when they say “socialized medicine” will be the downfall of health care in this country.

  20. morgasco says:

    My worry with this is it’s going to increase the time and cost to underwrite someone for insurance. They’re going to have to pull very complete records, increasing the time dramatically. Right now when the insurance company requests medical records it can take the clinics up to 3-4 weeks to get records over now. Now imagine they pull your record at one place, in those records they see you referred to another provider, then they’ll pull from there, etc.

    What kind of provisions are included for fraud by consumers?

    • mythago says:

      @morgasco: It’s kind of you to worry on behalf of the poor, beleaguered insurance companies, but really, all this means is they will have to do what they should have done before – underwrite claims, instead of trying to avoid paying claims.

      Fraud by consumer means recission is appropriate, same as it ever was.

      • morgasco says:

        @mythago: I’m not worried about the insurance companies, but you don’t think they’re going to pass this cost onto the consumer? That’s a joke.

        • From the cubicle of PGibbons says:

          @morgasco: Then let’s get rid of the bastards and get a Single Payer health system like every other modern nation!

        • s73v3r says:

          @morgasco: The insurance companies have entire armies at their disposal. I think they’ll be able to get through it.

          On the other hand, this might help the push for digitized medical records.

        • mythago says:

          @morgasco: So it’s OK to let them screw us for fear they might screw us anyway? That makes no sense.

          • morgasco says:

            @mythago: That’s the point, either way the consumer gets screwed, so which way makes them better off? Paying x amount more in insurance premiums, waiting x times longer to get coverage active (which in some states could disqualify them from having pre-existing conditions covered), etc. It’s a lose, lose situation as you said.

            And enough for “SINGLE PAYER!” and digitized medical records, it’s not how the system is now, and it doesn’t really add to the discussion on how this will work/affect people at this point and time.

  21. grossmont says:

    Kind of reminds me of this story:
    [abcnews.go.com]

    • morgasco says:

      @grossmont: That’s the story of the insurance being obtained though fraud. If you lie about health conditions that would disqualify you from having the coverage in the first place, why would they pay out the fraudulently obtained coverage (unless it was past the 2 year period and incontestable)?

      • s73v3r says:

        @morgasco: The article doesn’t say if the man lied on the application or not. Its possible he didn’t know. Its the insurance company’s job to decide at the time of policy issue if the person has a pre-existing condition or not. If they’ve issued the policy, then to me, that means the company decided he was ok, and should not be able to revoke the policy.

        • morgasco says:

          @s73v3r: Read up on insurance policies, life in general, the insurance companies have up to 2 years to cancel a contract if it was obtained through fraud, past that point, even if it was obtained via fraud they would have to pay. The insurance companies have your word and the MIB to rely on for information on your medical history, they aren’t and can’t be all knowing.

  22. TechnoDestructo says:

    Shit like this is what makes the “it would put private insurers out of business” argument against public health insurance laughable. I mean it takes my response from “so what?” to “good riddance.”

    • From the cubicle of PGibbons says:

      @TechnoDestructo: Yup, let ‘em close. When those same people have to rely on government Single Payer too, it’ll keep that system honest.

      By isolating and fragmenting healthcare delivery based on “ability to pay” and “ability to not be sick,” you have a ridiculous clusterfuck of a system that serves nobody well.

      The insurance execs can only build so many mansions with the dead bodies of the denied before hell eventually calls them home anyway.

  23. jeffjohnvol says:

    There shouldn’t be a national healthcare plan for everything, but if they REQUIRED everyone to have catastrophic insurance (and help those bottom 10% that can’t afford it) that would eliminate 95% of the heartbreak stories you hear about.

    I’m also tired of hearing about 20-somethings that piss and moan about not having insurance while they are in a nice apartment, drive a nice car with payments and pay for a $100/month iPhone data plan.

    • From the cubicle of PGibbons says:

      @jeffjohnvol: You forgot to mention Reagan’s “Black Welfare Cadillac Mother of 10″ and other things people tire of hearing about. Sure, you can find one or two – but it’s not the point. They’d be paying into the pool anyway if they have that level of wealth, just as they do now.

      “Catastrophic” health insurance with an $8,000.00 deductible/year doesn’t get your ass into a clinic BEFORE things turn “catastrophic.” Taxpayers end up picking up the slack when the poor of us finally get seen in the emergency room, and the costs skyrocket far above what early screening would have been. YOU pay for this now, as the insurance companies prefer young people with no medical history at all.

      Health insurance isn’t remotely comparable to auto insurance, and I believe it’s sick to think that way. It’s a choice to drive. Human bodies are pretty much a fact of living on the planet.

  24. jeffjohnvol says:

    Here’s another option. Why not let people that can’t afford insurance use the VA hospitals? If they are good enough for veterans, they’d surely be good enough for people that can’t afford insurance. The VA hospitals could use an increase in funding anyway.

  25. jeffjohnvol says:

    Canadians don’t have a government that insists on spending 3 times their nearest competitor (China) in terms of military spending. Of course if we had a super power next door to help protect us, we could concentrate on free healthcare.

    Candadians probably have more control over their politicians than we do. ours spend money like spoiled teenagers.

    • From the cubicle of PGibbons says:

      @jeffjohnvol: Only when it comes to giving away $$$$$$ to stockholders of banks and hedge funds. Something I doubt would be high on the list of most spoiled teenagers (except the spoiled trust funders).

      If it’s poor children, G.W. Bush couldn’t even support a measly $8 billion for them. I think that even a spoiled teenager would do better than that “spoiled adult.”

  26. From the cubicle of PGibbons says:

    God Bless You, California.

    Until we get politicians with the balls to finally enact Single Payer funding of Healthcare (which probably won’t happen until we get public funding of elections rather than the present “pay to play”), this seems some brilliant steps to reign in the insurance terrorists.

    This stuff was very well documented in the Movie “Sicko.” Regardless of your issues with Michael Moore, “Sicko” is a movie that everyone should see if only to meet real people *with insurance* that have been deliberately killed or maimed by the companies that happily took their premiums for years and then pulled these exact stunts when it came time to pay. You will also meet some real employees of Insurance Companies that were courageous enough to tell the truth that you don’t see on the HMO’s feel-good commercials.

    Every dollar they deny in medical coverage to you is a dollar in their coffers for “profit” and bonuses. There is a deliberate and observable policy of promoting the people who “save” the insurance companies money by denying claims for whatever reason they can dream up. The entire system is set up with an overwhelming incentive to deny care, maim and kill people.

    Thankfully, here’s a case of American politicians starting to reflect the wishes of their constituents rather than those who bribe them. Godspeed, California!

  27. Anonymous says:

    This article has glossed over the actual facts. It is unlikely that someone was retroactively declined because of unadmitted headaches. Based on experience in insurance (underwriting), the person told the doctor about headaches and was recommended to have a major test (CT/MRI) and did not complete it. The person then applied and did not admit this recommendation. That would be grounds for decline.

    For those that hate current insurance companies, go out and create your own company. If you think you have the right answers about assessing the underwriting and claims of policies, you should create you own company and not complain about the existing ones. I think you will see that either you will end up running the company like the existing ones or go bankrupt. The only question with the bankruptcy will be is it do to no money from so many claims or no money from charging astronomical premiums to cover the claims.

    Insurance is based on the idea that the whole will protect the parts if there is a problem. If some of the parts lie or pay less than their share, no one should be required to help them. If you think otherwise, feel free to send them your money.

  28. baristabrawl says:

    This happened to my partner. He had a surgery to relieve an internal infection thing. It was kinda gross.

    I digress…It is cheaper to refund all of your premiums than it is to pay for your illness. It’s also bullshit. If you insure me, then you insure me.

  29. JaneBadall says:

    This happened to my MIL. Her doctor didn’t tell her that her pap smear came up abnormal for TWO YEARS. So when she finally got a second opinion, the cancer was very advance.

    She had changed jobs a year ago and, thanks to the doctor’s meticulous care in informing her insurance company about the abnormal paps, she was dropped.

    We finally were able to get COBRA but it was a nightmare we didn’t need at the time.

  30. Michael A. B. says:

    I do work for a national health insurance company. At the same time, I am in favor of many reforms to the health care system.

    I am not against regulations, but one of the biggest nightmares for the insurance companies is not that there are regulations. It is that EVERY state has their own regulations and there are also federal regulations. Since all of them must be followed by any insurance plan, it is a patchwork to comply with each state. That is not even mentioning the plans where claims are paid with the employer’s money. Those are not considered insurance plans under state laws and are generally not subject to the state regulations. The employer usually decides EXACTLY what benefits to give to their employees on those.

    I also would not mind the concept of a single payer plan in the US, as long as it wasn’t the government. I say this because of long experience working with Medicare and with the military insurances. In the discussions I have had with others about the issue, I have yet to hear anyone on Medicare or a military insurance advocate for a single payer plan. Ask your friends going to the VA hospitals or ask your grandparents how much they like Medicare.

    Finally, though I would fully endorse expanding the protections that ERISA and HIPAA provide to group insurance members to those members that have a private plan, I don’t think that someone should be allowed to like on their application and not be held accountable. It is not the responsibility of the insurance company to make sure that an applicant does not commit fraud. What I can see happening with this would be insurance companies having to file charges for fraud when evidence comes to light.

    For those who think that there should be coverage for everyone, which isn’t a bad idea in my opinion, what LEVEL of coverage is the right of the people? There are limited amounts of resources in the world, so if $5,000,000 worth of care can save one person’s life, should it be their right to have that care, even if that same $5,000,000 worth of resources could have saved 50 other people instead?

    Also, if you think it is wrong for an insurance company to make a profit, is it also wrong for a drug company or wheelchair manufacturer to make a profit? If so, what about a hospital or an individual doctor? I am not saying that my opinion is correct or the only way to go, only that everyone should consider all of the implications of changes before they advocate for one or the other.

  31. H3ion says:

    One more rant for the evening, at least on this thread.

    If you have group coverage, the underwriting generally consists of slotting people into age categories in order to determine premium unless the group is very small in which case there may be real underwriting. But for an individual, an insurance company will investigate every illness and injury the person ever had and may deny coverage or carve out conditions based on some illness the person had as a small child. Is it fair? Hell no but it’s the system as it exists.

    We have a partial tradition of national health care in the United States. It’s called Medicare and President Kennedy pushed hard to get it enacted in the early 60′s. It works reasonably well although the premiums are ridiculously out of whack with the coverage provided. But it wouldn’t be all that much more difficult to expand the program, bring the premiums into line with reality, and continue some government subsidy, especially for the needy. Maybe a test program bringing the eligibility age down to something under 65 would prove the concept.

    Or we could go to a combined national health insurance and private health insurance combination as is used in some countries. The present system is not working. Emergency rooms which are required to treat all comers are inundated with people who don’t have the means to purchase health care from the system. Children are uninsured because their parents are uninsured and forego needed health care.

    I don’t have the answers and I don’t favor most socialist programs, but we really have to do something to bring everyone at least under a basic health care umbrella. We’re reported to spend more per capital than any other country and I don’t see us as health care consumers getting what we’re paying for.

    Now sorry, I’ll put away the soap box.

    • jeffjohnvol says:

      @H3ion: You are very informed on the subject, and I agree with you completely. Thanks for the information.

      To everyone else, insurance companies deserve to make a product, but must do so ethically. This law is to punish the scofflaws, not all insurance companies employ the despicable practices that this law is targetting.

      If everyone pitched in for catastrophic and the deductable was affordable it would be a better place. Should we pay more taxes so someone can get their throat checked for free? I don’t think so. The “worried well” drive up much of the costs. Also, there should be tort reform to reduce the cost of malpractice insurance that contributes to the cost.

  32. stevgex says:

    This is great idea since the industry can’t seem to do the right thing. But having long experience with California, our legislature will find a way to screw it up in a most spectacular fashion.

  33. Anonymous says:

    This will be my first post, long-time reader…

    I work in the medical field, in a large hospital on an Oncology unit, where we have many patients who are charity, at the hopsital’s expense. I regularly give treatments that cost well over $100,000 for each visit of 4-5 days. That’s for patients who have little to no compications. I have talked about this insurance issue with many different people who work at different points in the healthcare field, and I can tell you, almost unanimously the doctors I’ve talked to have no interest in a single government system. Many are eveb opposed to a single-payer system.

    These are people who spent 8-12 years of their lives racking up debt (most of them) to work in a field that requires they be on-call 24/7, and be right ALL THE TIME. We won’t go into the torture that is intership, where a person lives at the hospital 3-4 days at a time. Sure, there’s a calling involved, and there’s definitely some ego involved in becoming a doctor, but there also has to be some sort of FINANCIAL INCENTIVE. Without adequate financial compensation, all that work is for what? So they can make the same money (or much, much less) as their engineering or finance friends, but have ten times the responsibility?

    Most of them see the end result of a single-payer or government run healthcare system as being fewer and fewer people willing to take the risks and burdens to work in healthcare — ie, there will be less doctors, nurses, and hospitals. Ego and altruism only takes so many people so far…

    As healthcare resources slowly shrink, THEN we will run into the problems I keep hearing about in other advanced economy countries, such as long waits, difficulty getting providers, and lack of choice in your services. This is the battle those countries are fighting with the use of secondary insurance, thus injecting more capitalism into the system, as some others on here have mentioned.

    IMHO, much of these problems of lack of coverage could be solved on the state level, and could be yet another competitive sellng point for moving to that particular state from a personal and business perspective…but that’s another vein of thought, and I think I’ve meandered enough.

  34. SugarMag says:

    I certainly hope this is stopped. My 28 year old husband lost his coverage after being diagnosed with cancer. They paid his claims for a year before they went “hmm….he’s expensive. Let’s rescind his membership retroactively to save $$$”. Since his plan was self-funded there is no legal way to fight this. We ended up in $100,000+ debt and then he died. Thanks fkin’ Cali.

    (Btw – I’ve always warned people about self-funded insurance – or TPA (third party administrators) as they are called – because there are NO laws that govern their practices whatsoever. You have NO legal recourse when they pull unbelieveable and unethical stuff, such as this )

  35. synergy says:

    I remember reading about this years ago. It’s been an ongoing problem for many people for quite some time.