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Profile: Health Net
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Health insurance corporations defend their use of “rescissions,” or denials of care due to what they term “pre-existing conditions” among their customers. Washington Post reporters interview Los Angeles businesswoman Sally Marrari, who in 2006 had her coverage canceled by Blue Cross & Blue Shield after the firm claimed she had withheld information from them about a back problem. Marrari was undergoing treatment for a thyroid disorder, a heart problem, and lupus. After her coverage was canceled, Marrari was diagnosed with pancreatic cancer, and quickly racked up over $200,000 in medical bills. She says she had no idea at the time that she had any back issues. She is currently suing the company, and is getting health care by trading office visits for work on her doctor’s 1969 Porsche at the garage she owns with her husband. Marrari’s tale is one of many cited by the Post as illustrative of the insurance industry’s unpopular practice. The Post writes, “Tales of cancellations have fueled outrage among regulators, analysts, doctors, and, not least, plaintiffs’ lawyers, who describe insurers as too eager to shed patients to widen profits.” Insurance company spokespersons claim to have little knowledge of just how and why particular patients are subjected to rescission, and Congressional investigators point to a patchwork of state laws and policies which lead to confusion. Since 2008, California’s five largest insurers have paid almost $19 million in fines for unfairly canceling policyholders’ insurance after those clients filed claims. One insurer, Health Net, has admitted to offering bonuses to employees for finding reasons to cancel policies. Gerald Kominski of the Center for Health Policy says: “This is probably the most egregious of examples of health insurers using their power and their resources to deny benefits to people who are most in need of care. It’s really a horrendous activity on the part of the insurers.” But insurers say the rescissions are necessary to combat fraud among policyholders. An Anthem Blue Cross spokeswoman says: “We do not rescind a policyholder’s coverage because someone on the policy gets sick. We have put in place a thorough process with multiple steps to ensure that we are as fair and as accurate as we can be in making these difficult decisions.” Blue Cross has been fined $11 million over the last two years by California state overseers, and required to reinstate dozens of canceled policies. Officials from three insurance companies recently told a House Energy and Commerce subcommittee they had saved $300 million by canceling about 20,000 policies over five years. [Washington Post, 9/8/2009]
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