The Non-Existing Condition

Valerie Scaglione's story is almost comical:

Monthly premiums for Blue Cross coverage for them and their three daughters have soared over the years to almost $2,000, Scaglione says.

She estimates that in the past six years, the family has spent more than $140,000 on premiums and co-payments.

Yet when she tried to switch from the family's expensive individual insurance to a Blue Shield group plan that's more affordable, she said, she and her oldest daughter were denied coverage. She said neither of them has the medical conditions that were listed as reasons for being denied - bronchitis and a skin ailment.

"I have three children," said Scaglione, 47. "We have to have insurance. Stitches may be required. A broken bone may have to be set. We have no chronic diseases. We're a normal family. This is crazy."

Consumer advocates consider their story emblematic in many ways of complaints that plague the entire health insurance industry.

"We've seen people denied for things as minor as heartburn," said Anthony Wright, executive director of Health Access California, a statewide health advocacy coalition. "It gets to the point where living is a pre-existing condition.

Mrs. Scaglione's health insurance coverage costs three times as much as the family's MORTGAGE. And she can't get out of it and into a group plan, because Blue Shield flat-out invented reasons to deny the coverage. She has demanded to see the medical records that show her daughter having bronchitis and her having a skin condition called rosacea, but the health insurer refused the request.

As the debate continues, the Scagliones remain among California's 3 million consumers in the pricey individual insurance market.

"I wonder how many other families are like ours," Scaglione said. "What's the option, to be uninsured? This forces me to stay with our same plan. Premiums will go up and up and up. What, do we not feed the kids? It gets to the point of being absurd."

Blue Shield of California can be reached at (866) 256-7703. You might want to ask them what health care ailments they think you have of which you're unaware.

Health Care Policy And California

One of the worst elements of the current budget crisis is that it crowds out all of the other urgent problems facing the state. Nowhere is this more true than in health care. When the Nunez/Schwarzenegger overhaul failed last year, the problem never went away. And there are a host of other issues with health care delivery that linger. Fortunately, we're seeing a little progress and a few good ideas that can set a course for the future.

First, the state reached an agreement with Blue Cross to reinstate 678 patients who were wrongly removed from their insurance plan in a practice known as "rescission". Basically, the insurer waits until a patient files a claim and then invents a reason to cancel their policy.

The insurer has agreed to reimburse the subscribers for any out-of-pocket medical expenses and create a third-party process to review policy cancellations.

Blue Shield faces up to a $5 million fine if it does not take corrective action, said Darrel Ng, insurance department spokesman.

Between Jan. 1, 2004, and May 31, 2008, Blue Shield improperly dropped 678 subscribers, the agency said.

Obviously, the state meeting its responsibilities to protect California consumers is helpful, but it doesn't solve the big problems of health care delivery. One of the most pressing concerns how to get quality care out to rural areas, where there is a dearth of doctors and facilities. Fortunately, John Garamendi has a plan to recruit new doctors to rural health centers.

State Lt. Governor John Garamendi is proposing an ambitious fast-track medical school at University of California-Merced in an effort to create more doctors for the San Joaquin Valley, one of the most physician-poor regions in the state [...]

Entering freshmen — recruited from San Joaquin Valley high schools, with family ties to the region — would study at UC-Merced and local community colleges, then train in existing medical centers and clinics, instead of at a pricey research-oriented hospital.

They would be encouraged to train as primary care physicians and learn the challenges of practicing medicine in this vast region, where 130 languages are spoken and many residents suffer from chronic ailments such as diabetes, heart disease and respiratory ailments from dust, diesel-burning farm equipment and wood-burning stoves.

And then there are the macro issues with rising costs and the uninsured in general. Recognizing the dire needs in this area, foundations and nonprofits are stepping up in this area with advocacy that will hopefully bring more attention to the issue.

Overall, while the budget is obviously the pressing concern, we cannot overlook these burgeoning crises throughout California public policy. There is sadly no magic fix for them, even if a budget is someday signed.

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.

The California Report

Let me clear out my Inbox and set you on your weekend way:

• The Megan's Law website apparently is being used as a hit list and may have led to at least one death. This is the downside of a "what about the children?" über alles mentality.

• I'm not entirely certain about this claim that state lawmakers could have solved the mortgage crisis back in 2001 by cracking down on predatory lending practices. It's a boilerplate story, a typical "they bought off the politicians" frame. But the problem, as Paul Krugman notes today, is that home prices lowered, leading to negative equity for homeowners. Not sure what the lawmakers could have done about that. This is a national crisis that required federal action. And what action could be taken on the state level is in the purview of the Attorney General. Jerry Brown is investigating home loans from Countrywide Financial for improprieties, particularly forcing buyers with good credit into subprime mortgages.

• For all the talk about Steve Poizner, he is doing his job in suing Blue Shield for their loathsome practice of dropping patients retroactively after they seek coverage. Blue Shield's response?

The state's interpretation of laws governing policy cancellations "is simply wrong."

Stupid state, not knowing their own laws as well as a private entity!

• Nancy Pelosi is under fire for saying that Republicans like this war. Juan Cole is right to slam her for assuming that Republicans would act in good faith and help to end the war after the 2006 elections. What Republican Party was she talking about?

• Anthony Wright has the new amendments released to the public on the new health care reform. I should have a lot more on this over the weekend.

• I know that I didn't execute a House roundup in November, but honestly there wasn't a whole lot going on in the races. So I postponed it and will have a December roundup in the next few days.

• And finally, I would be remiss if I didn't mention the California Democratic Party buying three grand in French wine from Fabian Nuñez, who's now a wine salesman, I guess. I have to acknowledge Kevin Spillane (two Republicans in one day, I know) from the No on 93 campaign for the funny move of sending a bottle of Two Buck Chuck to Nuñez' office. It is an award winner.