Wednesday, February 13, 2008


Last December, I posted on a California Court of Appeals decision which slapped down insurance companies who collected premiums on policies which they suddenly cancelled when the people paying those premiums had the audacity to actually use their health insurance. The basis for the recission offered by the insurance companies was that the applicants had failed to include pre-existing health conditions on their applications. Here's what the Court held:

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.

Apparently the health insurers decided to do an end-around on the court, according to this front-page story in yesterday's Los Angeles Times:

Blue Cross of California is sending physicians copies of health insurance applications filled out by new patients, along with a letter advising them that the company has a right to drop members who fail to disclose "material medical history," including "pre-existing pregnancies."

"Any condition not listed on the application that is discovered to be pre-existing should be reported to Blue Cross immediately," the letters say. The Times obtained a copy of a letter that was aimed at physicians in large medical groups.

The California Medical Assn. sent a letter to state regulators Friday urging them to order Blue Cross to stop asking doctors for the patient information, saying it was "deeply disturbing, unlawful, and interferes with the physician-patient relationship."
[Emphasis added]

And then all hell broke loose.

In today's Los Angeles Times, a follow-up story details what happened.

In a statement issued about 6 p.m., the state's largest for-profit insurer said, "Today we reached out to our provider partners and California regulators and determined this letter is no longer necessary and, in fact, was creating a misimpression and causing some members and providers undue concern.

The announcement came after blistering rebukes Tuesday by physicians, patients, privacy experts and officials including Gov. Arnold Schwarzenegger and Sen. Hillary Clinton (D-N.Y.) after The Times disclosed the practice.

The letter had been sharply criticized Monday by the California Medical Assn., and Tuesday night its president, Richard Frankenstein, said: "This letter was part of Blue Cross' pattern of unfairly canceling policies when people need coverage most. We're relieved that Blue Cross is ending this particular tactic but continue to have serious concerns about this company's practices looking forward."
[Emphasis added]

Instead of doing their own homework on new applications, Blue Cross rather foolishly expected doctors to rat out their own patients, thereby interfering with the doctor-patient relationship. Further, doctors were being asked to violate patient privacy laws, something which patient advocacy groups noticed.

"They don't have a right to contact someone that you hired and you employed to take care of your health and to release data about you without your permission," said Deborah Peel, a Texas physician who founded Patient Privacy Rights, a nonprofit advocacy organization. "What's the point of paying for insurance if they are going to look for every reason to deny what you think you paid for, which is access to services to help you?"

Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, said information exchange also might violate state laws aimed at ensuring that physicians do not allow financial considerations to interfere with medical judgments.

"The real issue here is the doctor acting as a double agent," Court said.

Exactly so.

Two things come to mind: the first is that any kind of universal health care access which leaves private insurance companies in the equation is going to be faced with this kind of mindset time after time. Sen. Obama and Sen. Clinton, keep this in mind, please.

Second, this is what happens when the press does its job properly and informs the public when something awful is being done. The Los Angeles Times should be congratulated at doing what it's supposed to do and which it has proven it can do well.

And Blue Cross? Shame on you.

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Anonymous Anonymous said...

During Hillary's El Paso speech last night, before MSNBC got bored and left it, Hillary was talking about her healthcare plan and almost said getting into the federal employees' insurance group was a way to get universal coverage. Which is what Edwards was saying as well.

I think that Clinton and Edwards see their plans as a means to get to single payer insurance, without getting hit with "you're destroying private business!" crap.


10:45 AM  

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