Social Security & Medicare Notes

CA Blue Cross canceling policies if holder gets sick

You were farsighted and fortunate. You bought an individual health insurance policy from the best company out there, Blue Cross Blue Shield, when you could get it. Now you find you are ill, and you want to use the policy you were careful enough to get before getting sick.

Your diagnosis was hypertension or diabetes. That triggered a review of your policy, and Blue Cross cancels your policy instead of providing the coverage they promised.

Welcome to the world of "for Profit" health insurance. The LA Times (Registration required) published the story today. They haven't published the full list of conditions that trigger the review of your policy, because the company convinced the Judge to seal that part of the testimony. Wouldn't want competitors to learn proprietary business information and methods, after all.

A California Blue Cross employee testified in secret last year that the state's largest health-plan company routinely canceled policies of sick members after looking for inconsistencies — not fraud — in their applications.

Experts say, however, that state law allows only deliberate omissions or misstatements as grounds for canceling health coverage.[Snip]

Sheila Millan, testified that the reviews were triggered by claims made for treatment for certain illnesses, such as hypertension, diabetes and cardiovascular disease.

"When a claim comes in and there is a certain diagnosis, that would pretty much [consign] them to be reviewed for a possible preexisting condition," Millan testified. "There is a list." [Snip]

Plaintiffs' attorney Shernoff has filed policyholder suits for years. But he said he had no proof that the cancellations were anything more than isolated problems until the employees deposed last summer described how the reviews worked and revealed that the company kept monthly reports of its cancellation activity.

"That's when it became clear that this was systematic and widespread," Shernoff said

Of course, once Blue Cross has canceled your policy you cannot get another company to cover you. You have just become one of the 45,000,000 American uninsured, in spite of all your foresight, planning and careful payments.

But there is an up side. Blue Cross becomes more profitable.

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(via nyceve at Daily Kos)

posted by Richard @ 9:16 AM