The Economics Of Getting Sick: Rescissions & Fraud
If you’re not familiar with the word rescission, this is the practice of canceling policies because people didn’t reveal a preexisting condition. And it’s one of the key reasons why the health insurance companies can claim that there’s $100 billion in health care fraud every year.
Here’s one example of what they consider fraud…
“They said I never mentioned I had a back problem,” said [Sally] Marrari, 52, whose coverage with Blue Cross was abruptly canceled in 2006 after a thyroid disorder, fluid in the heart and lupus were diagnosed. That left the Los Angeles woman with $25,000 in medical bills and the stigma of the company’s claim that she had committed fraud by not listing on a health questionnaire “preexisting conditions” Marrari said she did not know she had.
By the time she filed a lawsuit in 2008, she also got a diagnosis of pancreatic cancer and her debts had swelled beyond $200,000. She was able to see a specialist by trading office visits for work on the doctor’s 1969 Porsche at the garage she owns with her husband.
That’s rich, eh? Can’t afford medical bills so she has to trade services for it…to work on the doctor’s vintage car. If that’s not a symbol for everything that’s wrong with how we buy and pay for health care in this country, I don’t know what is.
Of course, finding cases of “fraud” is a lucrative business and the insurance companies are making sure they identify all they can. But sometimes they get caught…
In the past 18 months, California’s five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.
To me, rescission is a patently immoral practice that amounts to private rationing so insurance companies can make more money. Not just make money. Not just stay in business. They are offering BONUSES to people who find fraud.
Folks, the “death panels” are here and while the insurance companies consider rescission a way to identify fraud in their system, I think this entire practice of finding ways to cut people from their insurance (especially in their most vulnerable hour) constitutes a systematic fraud on the public trust and it MUST end.
And that’s why, if we achieve nothing else in this health care fight, we should at least make it illegal for insurance companies to cut people from their policies because of preexisting conditions. That’s THE most important reform measure in this debate, and I hope those of you who continue to push the public option realize that.