Insurance Executive Admits To Killing Patients

Health insurers refuse to limit rescission of coverage

...Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive....

...An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.

"No one can defend, and I certainly cannot defend, the practice of canceling coverage after the fact," said Rep. Michael C. Burgess (R-Tex.), a member of the committee. "There is no acceptable minimum to denying coverage after the fact."...
http://www.latimes.com/business/la-fi-rescind17-2009jun17,0,5870586.story?page=1&track=rss

The state's Major Risk Medical Insurance Program is meant to serve as a last resort for the up to 400,000 Californians who have been rejected for health coverage by private insurers because of medical problems.

But it's not easy to get into. It's not comprehensive. And it's not cheap.

Los Angeles residents Susan and Stephen Perry recently turned to the program after being shown the door by money-minded private insurers.

Susan, 62, a freelance writer, was diagnosed with ulcerative colitis, a digestive disorder, four years ago. Stephen, 58, a part-time teacher and a poet, has Type 2 diabetes.

"We're spending all our retirement cash," Susan told me. "But this is the only insurance we could get."

The program is clearly well intended. But it shows just how bad our healthcare system is for those who fall into the cracks -- and how the pursuit of even limited coverage can wipe out a family financially.

The Perrys had been covered by insurance offered by PEN American Center, an organization of writers and artists, until they received notice recently that their combined monthly premium would soon top $2,000.

So they went shopping for coverage among private insurers and discovered that their business wasn't wanted -- by anyone.

That left only the Major Risk Medical Insurance Program, which charges the Perrys $1,746.29 a month for coverage provided by Blue Shield of California. That's almost $21,000 a year.

For that, they enjoy a relatively low $500 annual deductible. But they also face an annual cap of $75,000 in payouts. God forbid if one of them suffers an expensive illness or injury.

The Major Risk Medical Insurance Program, or MRMIP -- pronounced "Mister Mip" -- is essentially catastrophic health insurance that doesn't cover catastrophes.

It's last-ditch insurance that's intended to safeguard hundreds of thousands of Californians turned away by private insurers but that lacks the funds to cover more than 7,100 people at any given time.

It's a system so anemic that even its boss readily acknowledges its shortcomings.

"We don't advertise the program because we can't handle everyone who comes to us already," said Lesley Cummings, executive director of the state's Major Risk Medical Insurance Board, which oversees MRMIP.

MRMIP was established in 1991 to address the growing problem of people with medical conditions being pushed aside by private insurers. Almost from the first day the program was unveiled, a waiting list has existed for enrollment.

It currently takes as long as four months to be enrolled in MRMIP. And even then, you have to wait three months more for coverage of prescription drugs to kick in.

To accommodate more people, the state created a companion system, the Guaranteed Issue Pilot Program, which now provides coverage to about 6,000 people. But that program was closed to new enrollment after participating insurers balked at some of the state's terms.

Under MRMIP, California taxpayers pay 40% of the premiums to enroll people in individual plans offered by Kaiser Permanente, Blue Shield and Anthem Blue Cross. Those premiums can run as much as 37% higher than market rates for similar individual policies because of the enrollees' medical history.

And the $75,000 cap on annual coverage is among the lowest such limits among similar state programs nationwide.

These stories — told by hundreds of thousands of ordinary Americans who have watched their premiums rise faster than wages, and spiraling costs shackle American businesses — put a personal touch on the health care crisis.