"This American Life" On Health Insurance's Fine Print
A recent episode of This American Life-the fine, fine public radio show-has an excellent piece on the health insurance industry's use of "rescission." This is when people with individual insurance policies come down with an illness (or get pregnant) and the insurance company denies coverage by claiming it was a preexisting condition.
As exhibit A, the segment focuses on Robin Beaton, a woman diagnosed with invasive breast cancer whose insurance was rescinded after Blue Cross Blue Shield misinterpreted an old acne diagnosis of Beaton's as pre-cancerous.
You can listen to or download the segment online for free here. It is excellent.
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Comments:
This is the number one issue I have with these Americans that are fighting so hard against the government getting involved with healthcare. They state they don't want the government telling them what doctors they can see, what procedures they can have, what medicines they can take. Yet, we ALREADY HAVE THAT. Your insurance company does it daily. They decide what doctors you see, if you can have a procedure or not, whether you live or die. Personally, I'd have to go with the government...at least they are "not for profit", meaning they don't have throngs of people looking over your policy to find a small discrepancy, just to disqualify you permanently for coverage, and then send you a bill for the $100,000 surgery you had 3 months ago that they said they would cover. Yes, you will have to choose between the lesser of 2 evils, but greedy corporations we have ZERO control over, vs politicians we vote into office regulary...I think I have to go with government.
I've got to admit, being the free market advocate that I am, that the issue of rescission is one that is most damaging to the free market argument in health care and which gives a boost to the idea of legislative-driven reform. I just can't think of a way that free markets can solve that problem.
@Saboth: Apparently, it's less evil to these people if it's for-profit companies making the decision about who lives and who dies. At least the government has an interest in keeping me alive and functional enough to pay taxes! Not to mention that those taxes are a hell of a lot lower than the annual cost of the plan offered by the only insurance company that would consider me (and I couldn't afford it).
At the rate insurance premiums and healthcare is going up under the private system (I mean, these companies make massive profits)...no one will be able to afford coverage in the next 20-30 years, I'd guess. I know people that currently, 50-60% of their paycheck just goes towards healthcare premiums. Just to have claims denied as soon as they actually need it.
@TinkishDelight: I try to avoid health insurance threads, but I feel I have something to contribute to your problem.
I have found from personal experience that the insurance company denies a certain percentage of claims or people (depending on how you look at it) and the only way to get them to pay is to bug the crap out of them. Speak firmly, keep filling out paperwork and calling. With my sisters condition, we had to do this every three months for years. Eventually, we just scanned the forms and printed new ones so we didn't have to fill out our info each and every time. Best of luck.
@humphrmi: Free markets are all fine and good with transparency, which the insurance industry unfortunately has none of.
I was uninsured for about 7 years some time ago, except for one year I spent on welfare/Medicaid. I received some of the best healthcare of my life on Medicaid, and it was super easy to use--I presented my card at the office of a doctor who took Medicaid (of which there were zillions), paid no copay, and received the care I desperately needed. Granted, some benefits weren't so hot (at the time the dental benefits were pretty much restricted to cavities or get your teeth pulled--dumbly not covering preventative care). But I was never turned away or denied service, which is more than I can say for the insurance plans I had over the years. The real point, as many have pointed out, is insurance companies are all ready DOING the things the rabid anti-reformers are spewing about. It's so idiotic and uneducated. Furthermore, if any of them lost their job/insurance or became severely disabled, I wonder if they would be quite so adamant that the government should not help the uninsured, indigent, or unemployed. Would they reject the coverage? Will they reject Medicaid when they are of age?
@Saboth:
I pretty well agree with your statement here. I'm amazed at how many times you hear of an insurance company doing something pretty ruthless in the name of profit and completely getting away with it. Like times when someone's surgery is denied and denied for months, then finally the insurance company approves the surgery only for the person to die before it can happen. I mean, how is that not a crime? They basically just killed somebody.
I just wanted to add I love following the coverage of some of these wackos talking about how the government is trying to kill their grandparents and stuff like that.
|*CONTROVERSIAL REMARK*|
@Saboth: Exactly. It's mind boggling. Esp. when I see old people on MEDICARE demanding that the government stay away from their health insurance. Um. Too late.
I think the people who are so concerned about their private or employer provided health care being affected negatively by health care reform have never had to deal with really serious health issues. Or else, they wouldn't think everything is so rosy.
I have really great health insurance fully paid for by my employer. But when I had thyroid cancer last year, I still had to wait 4 weeks for and ultrasound, 3 weeks for a biopsy, and 5 weeks for surgery. And my first three choices of surgeons wouldn't take my insurance (Oxford), and I ended having to go to a different hospital to find a highly-rated surgeon who would.
Last but not least, they tried to deny the last body imaging scan that would determine whether all the cancer had been eradicated.Which required me and my doctor to make lots of phone calls (during a time when I felt like absolute shit). I only ended up paying about $400 for what was about $75,000 of care, but the process was far from perfect.
Not to mention the fact that I will be screwed if I can't work or lose my job. A private insurance plan would cost me $1100 a month (just for myself). I would give up my private care in a heartbeat if a true single-payer plan would be enacted.
@Saboth: Why take drastic action like turning the government into a health care provider instead of just outlawing the individual bad practices? Small reforms can lead to good changes.
@CRNewsom: Thanks. This is currently happening and with all the debate going on about healthcare I just threw up my hands in frustration and haven't really dealt with it. I'll definitely give it another go.
@humphrmi: The market is barely a free market. You can only choose in-state providers which means every large insurance company needs at least 50 offices (one per state) increasing their overhead (costs) which get passed on to every customer. Removing dumb regulations like that can decrease costs and increase competition, which will lead to the best providers coming out on top.
@humphrmi: Yeah, I lean towards libertarianism but some industries are making it real difficult, health insurance companies being the worst. They operate like Best Buy extended warranty plans!
I saw clips of congressional hearing where they took the insurance industry to task. The CEO's showed no embarrassment at all and refused to stop the practice!
They really deserve a government competitor. I am not sure it would work out exactly how we would like, but I wouldn't feel bad about these companies going down.
Yay another shill article for the crappy government health care scheme.
@NICU: Because irrespective of small reforms, for profit insurance companies will lobby and successfully insert loop holes for them to deny care, etc. Small reforms don't fix big problems.
Plus, it is going to literally prohibitive for people to afford any health insurance worth having.
@nytmare: Some time ago, I remember hearing that you can't actually sue a managed care health plan, under some protection law. I'm not sure of the details or specifics, but I know that you hear very little these days about situations where health care is denied, someone dies, and a huge trial ensues.
Maybe someone with more knowledge hear can enlighten us about suing health care plans...
@CRNewsom:
Exactly. My wife has a genetic autoimmune disease. So she has to see several specialists several times a year, and she is on several drugs. Basically EVERY single office visit or claim we make comes back denied, and she has to fight tooth and nail...but eventually they cover it. Still a shame that this could go on the rest of her life.
@nytmare: ERISA severely limits an insured's ability to sue an insurance company for denial of payment.
@NICU: I disagree. Reform in this country tends to be a game of whack-a-mole. Outlaw one sleazy practice, and an even sleazier one pops up.
There's another kind of reform that could work,I can't remember the term for it, but it goes like this:
Instead of outlawing certain practices, outlawing EVERYTHING and only allowing certain practices. Sort of like, if the first kind of regulation is putting fingers in dams (with new leaks springing other places,) just building a whole new dam and choosing when and where water will be allowed through.
Acch, I suck at explaining this... anyone know what I mean and can help me out?
I am extremely concerned about government getting more involved with health care, but you do agree that recission and the pre-existing condition clauses need to go, correct?
@NICU: I agree that they can help. However, if we outlawed the pre-existing conditions game, you don't think they would find another way of not paying or simply not covering your illness? They would start aggesssively retroactive cancellations (where they find a typo or mistake in your inital application); they would limit coverage (more than now); deny coverage for paperwork problems; and significantly raise premiums.
Think about credit card companies, now that we've outlawed some of their shady practices, what have they done? But healthcare and not a credit card or bank account. Comparison shopping isn't helpful when you get cancer
@NICU: This is what I've been arguing for. Ban rescission. Create a health insurance exchange (which would actually make sense given that the policies would be state-regulated rather than federally-regulated).
The biggest problem that we face is not evil health insurance companies. It's the fact that two-thirds to three-quarters of our increase in health care costs over the last 40 years has come from technological innovation and the way we pay for insurance. The government has created a system that encourages high premiums and low deductibles and then everyone is shocked when premiums go up because we don't want to pay out of pocket for the increased technological costs.
It was during the same hearing that Ms. Beaton spoke that companies were then asked if they would agree to ending recision when it was non fraudulent and they refused.
But this isn't being covered, we're just a bunch of grandma killers instead.
@Trulymadlyme: Yes, and when you've just spent all your money on treatment that should have been covered, it makes it that much more difficult. Contingency is an option, but I'm not sure that its a realistic solution. Also, it would be difficult to win these cases; it would be like arguing against John Yoo and his tourture memos.
@Josh_G: But when the government does it isn't like you can sue them since they are the government and can do whatever they want.
@kimdog: I've noticed those who oppose reform in my office are the ideologue Republicans -- Democrats wrong 100% of the time, Republicans right 100% of the time. I just don't get it. They think because they're OK right now that things aren't broken -- my company has switched health insurance 3 times in the past 2 years, haven't gone more than 9 mos. with one vendor.
I vote both ways, but I've gone Republican more often than Democrat. At this point, though, I honestly cannot ever see myself voting Republican again for House, Senate, or President, and it's largely because of the healthcare issue. They had everything for 6 years and did absolutely nothing. That's not acceptable to me and a lot of others. I'll take something, flawed though it may be, over nothing. I'll give credit for trying here.
@NICU: I've got a two-word argument against your suggestion: credit cards.
Deregulate the insurance market and companies will put their offices smack dab in the middle of whichever state has the fewest consumer protections. There will actually be a race to the bottom with each state competing to be more friendly to insurance companies in order to secure the jobs.
Do you think most of your credit cards are issued from Delaware and South Dakota out of sheer coincidence? [www.bankrate.com]
@rugman11: "It's the fact that two-thirds to three-quarters of our increase in health care costs over the last 40 years has come from technological innovation and the way we pay for insurance."
Would you have any links on this? I just don't see 2/3 of costs simply being technology advances. I agree they comprise some component of the costs. Also, we may be advanced in technology, but other countries aren't excactly applying leeches, so why is it so much more expensive for us?
"The government has created a system that encourages high premiums and low deductibles and then everyone is shocked when premiums go up because we don't want to pay out of pocket for the increased technological costs."
I'm also interested in your reasoning for this. You may not have a link, but want to understand how this happens.
"Create a health insurance exchange (which would actually make sense given that the policies would be state-regulated rather than federally-regulated)."
The current plans have this. They just also offer a public option. So is your opposition to simply having a public option, even if its part of an exchange?
@I Love New Jersey: How is a cancer patient having her insurance rescinded due to acne a 'shill article'? These are actual events that happened. What here constitutes 'shill'?
@TinkishDelight: Also, contact your state's insurance commissioner. It's their job to regulate the insurance companies, and they should, at the very least, track the complaints so they know which companies need reigning in.
@NICU: I gather from your "handle" (CB-radio-speak, I know, I'm dating myself) that you work in the healthcare industry - a neonatal intensive car unit, perhaps? If so, are you paid by the procedure, or are you a salaried employee?
Have you noticed that most credit card companies are based in a single state? Why is that, do you think? Because they like the weather in that state, or because state regulations are favorable to them? How would this be any different for health insurance companies? Would they set up shop in a state that allows for denial of insurance?
@Saboth: because replacing private insurance with government insurance isn't an improvement. if it worked ideally (which the US government is of course renowned for) it's still not addressing the core problems of health care service today, and it's going to cost a ridiculous amount of money.
the problem with the system today is that people rely on insurance too much. insurance used to be for catastrophic events and you'd pay for regular visits out of pocket. today people use insurance to pay for everything they can without considering what the services actually cost-there's no pressure on health care providers to provide competitive pricing. i'm definitely guilty of this-it's way easier to hand over an insurance card and $20 copay than to worry about the cost of being seen at the clinic.
the real solution is get people off the insurance habit and start paying for services with their own money. when people are in this situation they pay a lot more attention to what they get for what they're paying, which forces providers to compete for business. but people need an incentive to go this route-they're not going to make things harder for themselves without something to gain. HSA's are a good way to do this. they let people use pre-tax money for health care services and items and they can save up the leftovers for later use. this can provide a big financial incentive over typical insurance plans. people can go back to using insurance for catastrophic events.
the insurance industry also needs an overhaul, but basically they need to be responsible for what they're selling. this is where i'd rather have the government involved-enforcing contracts that insurance companies don't seem to concerned with.
@I Love New Jersey: I'm guessing you are young and get your insurance through your job. If so, you'd better hang onto that job and don't get sick or have an accident.
@humphrmi: You cannot have for profit insurance for something that we deem a necessity. Your life is guaranteed.
We subsidies food, Oil, gas, some health care, and various other items we deem to be a necessity of life. Yet the same people who scream about free market crap fail to see that we lack that very notion in many of the markets we currently have. You cannot have a society devoid of government intervention. It's just not a possibility.
You want a free market society start paying 10 dollars for oil and gas, or start paying 5 dollars for an ear of corn. Then come back here and tell me how awesome free markets are.
@Saboth:
Except the agreement between you and your insurance company is a contractual agreement you can WALK AWAY from at any time you choose to get another insurance company. Its rather hard to walk away from the US Gov't when they start giving sh*tty service now isn't it?
And you're right, the gov't isn't profit motivated, which easily makes them worse. The the gov't flunky, you're just a number that REALLY doesn't care if you live or die because they don't even get premium payments from you. If you need further proof, reference the people on Oregon's public health plan that have been denied chemotherapy with an offer of assisted suicide.
And please nobody spout that crap about "well you can't walk away if its employer provided." I agree, you can't easily, but thats an argument to get employers out of the business of providing health insurance and not an argument to get the gov't deeper into that same business.
@LincolnK: But how will HSA's address the pre-existing condition denials. In fact they have even more pressure to deny, because by definition, its a big event (cancer, accident, heart attack). Also what about those who make $10/hr. How much can they possibly save for the routine stuff. Competition might lower some costs, but not enough to make it affordable for the same people, who don't have insurance now. I view your solution as a part of a greater set of options and regulations, not a solution in itself.
@littlemisslondon: Of course, without an edit button, I can't fix it...it should read *|CONTROVERSIAL_REMARK|*.
@LincolnK:
There is simply no way the average american can pay out of pocket for most services.
People point at Canada as a "bad" example of universal healthcare, due to long waits. However, the healthcare of a country is only as good as the money its citizens can put into it. This is why many European Countries have great socialized healthcare. The US has a GDP about 10x higher than Canada, and almost equal to the whole European Union. I am pretty sure our universal healthcare would be pretty darn good. And many people are already paying 10-50% of their paychecks for their healthcare, so it's not like an increased tax would be that noticable.
Plus...when insurance companies are involved, they wrangle the price of a service way down from what the actual bill is. If a surgery is 50k, they are not paying 50k. If a person decided to pay out of pocket...they are paying 50k.
@nova3930: Wrong. It's almost impossible to "WALK AWAY" from private insurance. Most of us are locked into what we have. But if you think "employers [should be] out of the business of providing health insurance," but the government is evil, then who the hell do you think is going to do it???
Businesses operating for a profit means they're much more likely to deny care than an organization, such as the many levels of government, that has an interest in keeping people healthy and productive.
@NICU: Which has nothing to do with the rescission issue. The free market allowed it to happen. Market failure.
@ARP: "Would you have any links on this? I just don't see 2/3 of costs simply being technology advances."
Granted, these numbers are from 1940-1990. In 2008 the CBO analyzed three different studies of real per capita health care spending in the US. One study placed the number at 49%, one at 65%, and one between 38% and 62%. Another 10-13% of the increase is due to third-payment. As far as other countries go, I can only speculate, but I imagine it has something to do with the fact that most have government-run systems that pays less than American insurance companies do (imagine Medicare's 80% payments on a nation-wide scale).
"I'm also interested in your reasoning for this. You may not have a link, but want to understand how this happens."
It's from the same link I offered before. Basically, the employer-based system hides the true cost of premiums (most people have no idea how much their total premium is, including employer contribution). Additionally, because the premiums are taken out pre-tax, most people don't consider it money that they have, whereas copays and deductibles come from out of pocket expenses. It therefore encourages people to have high pre-tax premiums with low deductibles so they can minimize their post-tax, out of pocket expenses. From that article: "This encourages those with employer-provided health insurance to ignore some of the higher premium costs, and pushes us toward policies with low deductibles and copayments (at the expense of higher hidden subsidized premiums). These low deductible policies encourage us to use low value health care and result in unsustainably high and rapidly growing insurance premiums that crowd out wage growth."
"So is your opposition to simply having a public option, even if its part of an exchange?"
I do oppose a public option (mostly because many of the costs could be hidden elsewhere in the federal budget thus providing artificially low premiums), but the issue here is the exchange. A health-insurance exchange makes sense under state regulation because different states can offer different plans. With federal regulation setting a minimum level of care for the exchange, all of the baseline plans would be more expensive. For example, an HSA with a high deductible that covers everything past the deductible but has no specific coverage would not be allowed in the exchange, even though it's a great idea for some people.
I have a shitty insurance company story. They didn't drop me, but they are refusing to pay. After losing a lot of weight and feeling anxious and a few other symptoms my physician recommened I be tested for hyperthyroidism. The tests came back negative and my weight and energy soon went back to normal, but a month later I got a letter from my insurance company telling me they weren't going to cover the cost of the bloodwork. Apparently being tested and coming back NEGATIVE for a disease qualifies as a pre-existing condition.