Wednesday, February 24, 2010

How Capitalism Works: 101

I still am amazed that some of the most interesting reporting in the Los Angeles Times occurs in the Business Section. Either I'm getting old or the Business Editor actually "gets it."

Yesterday, there were two important articles on Anthem Blue Cross, the health insurance giant owned by Well Point, related to the huge premium increases announced by the largest issuer of individual health insurance policies in California. Anthem, which will be discussing those hikes with Congress, maintains that the premium hikes are necessary to offset the cost increases in medical care. Somehow, however, the company was able to send millions of dollars to the parent company. Just how much is detailed in this article.

If that doesn't raise suspicions, the issues raised in this article should. It seems that Anthem has run afoul of state law with respect to how they do business, and the state Insurance Commissioner isn't too happy:

California's largest for-profit health insurer violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, the state's insurance commissioner said Monday.

Anthem Blue Cross of Woodland Hills could face fines of up to $7 million stemming from the alleged violations from 2006 to 2009. Commissioner Steve Poizner said the insurer repeatedly failed to respond to state regulators in a "reasonable time" as they investigated complaints over the last year.

Nearly 40% of the violations in the Anthem case, 277, stem from allegations that the company failed to pay patient claims within 30 days as required by state law, officials said.

Read in tandem, the two articles are a fine example of why access to health care shouldn't be entrusted to the marketplace. Doctors don't get paid, patients don't get the treatment they've been promised, but corporations reap millions in profits in what can only be seen as a variation of a Ponzi scheme.

There is this, however: the coverage by the Times has come at a particularly auspicious moment. Insurance companies are being shown up for the greedy entities they are just when health care reform was losing some steam. And for that at least, I am grateful.

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Blogger What was done said...

Getting old is only in our mind.
Age never prevented people from doing things:

1:28 AM  

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