29 August 2009

Ex-Cigna Executive on Health Care Rationing

Wendell Potter enjoyed a 20 year career with health insurance corporations, such as Humana and Cigna. At Cigna, he was Head of Corporate Communications; he retired from this post last year.

In June this year, he testified before a Senate committee investigating insurance (see his testimony here [pdf]). Before the committee, Potter asserted that,
companies routinely drop seriously ill policyholders so they can meet "Wall Street's relentless profit expectations."

"They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment," Potter said. "…(D)umping a small number of enrollees can have a big effect on the bottom line."(ABC News)

According to Potter, there there are three ways in which health insurance companies strive to maintain their companies' stock prices:

1) Rescission: "seizing upon a technicality to cancel the policy of someone who has been paying premiums" who then "gets cancer or another expensive disease" (Kristof).
2) Deny permission for expensive procedures
3) Raising premiums for a small business after am employee is diagnosed "with an illness that would be very expensive to treat. That forces the [small] business to drop coverage for all its employees or go elsewhere" (Kristof).

Blue Cross has used rescission "to cancel more than 20,000 policies over five years, saving the company $300 million in claims" (Kristof). Perhaps you recall the fury unleashed at Blue Cross last year (2008) when the public learned about the company's practice of "asking physicians in a letter to look for medical conditions that could be used to cancel patients' insurance coverage" (L A Times). The company had sent out 1,000 such letters per month "for years" before someone complained about it (L A Times). Blue Cross stopped its letter-writing campaign when it became known.

If you, who pay your premiums dutifully, are diagnosed with a disease, and your insurer tells you that the cost of treatment exceeds your policy (or they deem treatment as "experimental" and, therefore, ineligible for coverage), or if you lose your job and, consequently, your health insurance benefits, or if a colleague becomes ill and forces your employer to drop all coverage, what then?

Added: A subsidiary of WellPoint, Anthem Blue Cross, has just sent its customers an email warning of the horrors of a public option. This post, "WellPoint Calls Attention To Its Own Immoral Practices In Effort To Smear Health Reform," points our how WellPoint undermines its claims about health care reform.

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