Insurance Companies: Profit Through Creating Tragedy

Health care reform in California is in stall mode right now, and with each passing day the price tag for gathering signatures rises. But between the twin fundraising efforts of the Speaker and the Governor, as long as they cancel travel for a month they should be fine.

What's working against the proponents of health care reform, in my view, is the continuing tragedy of Nataline Sarkysian. By November 2008 this will be out of the headlines, but within weeks the State Senate will be debating the merits of a reform measure that keeps the insurance companies in business to do this:

A Friday funeral was set for the Northridge teenager who died last week after her insurer refused to pay for a liver transplant and then reconsidered. Meanwhile, the girl's health plan stood by its initial decision Monday.

Philadelphia-based Cigna HealthCare has a record of approving coverage for more than 90% of all transplants requested by its members, as well as more than 90% of the liver transplants, company President David Cordani said in a memo addressed to employees and distributed to members of the media.

This is definitely a time to be citing statistics.

CIGNA clearly makes decisions based on corporate profit and lawsuit threats. They decide what treatments are "experimental" based on flowcharts and spreadsheets, not by looking into their customer's eyes. And their complete lack of empathy proves that they're willing to let this continue.

Just the other day, a state appeals court ruled that insurers cannot play the game of canceling coverage because of faulty applications only when the patient actually needs to use their health care.

California health insurers have a duty to check the accuracy of applications for coverage before issuing policies -- and should not wait until patients run up big medical bills, a state appeals court ruled Monday.

The court also said insurers could not cancel a medical policy unless they showed that the policyholder willfully misrepresented his health or that the company had investigated the application before it issued coverage [...]

The decision came in a closely watched case involving Steve Hailey, an Orange County small-business owner whose coverage was canceled by Blue Shield of California after he had a disabling car accident. The ruling in favor of Hailey sends the case back to the lower court for trial and requires Blue Shield to pay Hailey's appellate costs.

The types of tricks of the trade employed by CIGNA and Blue Shield are a nationwide trend. Legislation and lawsuits have yet to stop them. They'll claim that they can't do business without this kind of chicanery. At some point, government must grant their request.