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Actual coverage is part of insurance

This is a problem-solving moment for government. President Barack Obama, and the Democrats who control Congress are rolling up their sleeves, sharpening pencils and trying to deliver health care changes that cover many more people, provide a safety net for the rest of us and won't bankrupt our nation the way the current system most assuredly will.

With little to offer beyond raspberries from the sidelines, Republicans have consigned themselves to spoilers. Their answer (and the answer of a handful of insurance-industry-beholden Senate Democrats) to the health care crisis gripping this country is to throw themselves in the way of a public option to protect the rapacious profits of the private health insurance industry.

But what we have learned about free market health insurance is that even when one can get an individual policy it is often like having no insurance at all. A standard in the industry is to look for ways to reap premiums, then skip out on promised benefits. This is the status quo Republicans are fighting to retain.

A public option is a necessity, because it is the only way to temper the demonstrable amorality of private insurers. If companies have to compete with a government plan that doesn't treat customers like they are a gambler's easy mark, the companies will have to reform or wither.

Rescission is when a person with individual health insurance has their coverage yanked just as they get sick. This industry practice is known as "postclaims underwriting" and is widespread even where states, such as California, have laws against it.

Among the practice's many victims is registered nurse Robin Beaton, 59, who told a subcommittee of the House Energy and Commerce Committee this month of her ordeal at the hands of Blue Cross Blue Shield.

After she was diagnosed with an aggressive form of breast cancer, the company canceled her policy. Beaton says that the company "took my high premiums" but searched "high and low" for a reason to rescind her policy after she filed a claim.

Blue Cross found a notation written on her dermatologist's chart that seemed to indicate something precancerous. It didn't matter that her dermatologist called the insurer to say it was just acne. Beaton also had inaccurately recorded her weight in applying for coverage and failed to mention that in the past her heart would beat fast when she was upset. She said that Blue Cross noted these lapses as possible bases for rescission.

A double mastectomy to save Beaton's life was postponed until she could find other insurance or pay for the operation herself — an impossibility on both counts. Beaton said it took intervention by her congressman to get Blue Cross to reinstate her policy.

Insurance companies employ people who do nothing but search through a customer's medical history once an expensive claim is filed, looking for misrepresentations or discrepancies, even unintentional ones, in the insured's application.

According to the committee's investigation, at least 19,776 policies were rescinded between 2003 and 2007 by the three insurance companies who testified at the hearing — WellPoint Inc., Assurant Health and UnitedHealth Group. The moves saved them at least $300 million.

Policies are canceled for failing to disclose information even when patients didn't know what a doctor had written in their medical chart. Rescissions occur even if an omission is unrelated to the policyholder's current ailment.

Assurant automatically initiates an investigation into the policyholder's medical history if a claim is made for one of 2,000 diagnosis codes. For WellPoint, it's 1,400.

Top executives of the three insurers were asked by subcommittee Chairman Bart Stupak, D-Mich., if they would vow to limit rescissions to cases where there had been an intentional fraudulent misrepresentation. They all answered "no." Dumping the sick is too good for business.

Private insurers are squealing about the possibility of a government option, but they brought this on themselves through their greed and predation. We can't trust them to do what's right when we get sick. Now it's their turn to feel a little sick themselves.

Actual coverage is part of insurance 06/27/09 [Last modified: Saturday, June 27, 2009 5:30am]

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