Health Insurance Industry Policy between 2010 -2014 – Impact on the Average American Life

July 10, 2010

By Padmini Arhant

Further to the article published on this website – “Amendments to National Health Care Legislation,” 04/07/2010 under “Health,” category, the predicted Insurance industry practice is taking toll on ‘average’ American lives.

Source: Bay Area News Group July 4, 2010

By Sandy Kleffman – skleffman@bayareanewsgroup.com – Thank you.

“Health Care Nightmare,” – Minor conditions lead to major insurance costs

Ralf Burgert had no idea how costly toenail fungus could be.

The San Rafael resident got rid of the common infection by treating it with the prescription medication Lamsil. But he could not believe the reaction when he applied for a health insurance policy on the individual market a short time later.

Because of the toenail fungus, an insurer informed him, he would be in a higher-risk insurance pool with a 50 percent jump in premiums.

Consumer advocates say they are often perplexed by the minor health issues that can create serious problems for people seeking health insurance. Each company sets its own policies.

People have been rejected for such common conditions as acne and high blood pressure, said Judy Dugan, research director for Consumer Watchdog.

“If you are pregnant, (insurers) will run the other way screaming,” she added.

“They don’t want to insure a baby until they have looked it over to make sure it’s absolutely healthy.”

A Fremont doctor said she was shocked when one insurer rejected her application because of her eczema, seasonal allergies and a brief bout with viral meningitis, despite a full recovery.

At age 45, Angelique Green, chief medical officer of the Tri-City Health Center, considers herself very healthy, with low cholesterol. She has never smoked, and her hobby is hip-hop dancing.

“To say no to somebody and not even try to work with them, that’s just wrong,” she said.
“It was very frustrating.”

Consumer advocates say they want to make sure that insurance companies do not become more aggressive with denials or dramatically hike premiums for those with pre-existing conditions during the next four years.

“The insurers now compete based on their ability to deny (coverage) to anybody who might actually need care,” Wright said.

“That will change, but not in the near term, and that’s a problem we will have to reckon with.
“It’s particularly important to be vigilant between now and 2014,” he said.

“We would like to see that the regulators closely monitor the denial rates for pre-existing conditions and the reasons for the denials.”

Insurance industry representatives call such concerns misguided and say they do not expect any major changes in underwriting policies before 2014.

“We have a competitive market in California, so health plans want people to buy their coverage, and they will charge a competitive price,” said Patrick Johnston, president and CEO of the California Association of Health Plans.

He noted that the insurance industry generally supported eliminating medical underwriting and guaranteeing coverage to applicants, as long as the change came with a government mandate that most people buy insurance.

Pre-existing conditions are not an issue for the 21 million Californians who have group insurance, usually provided through employers, because group plans accept people regardless of their medical histories.

But they can be a big worry for the 2.5 million Californians who buy insurance on the individual market.

California and many other states will soon set up new high-risk pools for those who have found it difficult or impossible to obtain coverage.

California will receive $761 million to fund this new pool, a dramatic increase over the $33 million for the state’s existing high-risk pool. But this money will not cover everyone with pre-existing conditions, and some may find the still-to-be-determined premiums too costly.

As a result, many people with pre-existing conditions are expected to remain in the individual market during the next four years and experience frustrations as they attempt to find coverage, consumer advocates say.

Consumer advocates such as Wright say people with pre-existing health conditions often encounter serious problems in obtaining coverage that hopefully will be resolved in 2014.

“Many people find it bewildering that it’s exactly the people who need coverage who are the ones who cannot get it,”

As more and more people get denied for smaller and smaller medical problems, both the industry and individuals have figured out that this is not sustainable,” he said.

“The system is broken.”

Redwood City resident Terri Mullen agrees. When she experienced work-related stresses in 2008, her doctor suggested she see a therapist and try anti-anxiety medication. Little did she realize the problem this would cause.

When she later applied for an individual insurance plan, a firm told her she would be in a high-risk pool with much higher premiums because the therapy and medication were signs of a serious mental illness.

Now, she says, “I’m not stressed out anymore – I’m mad.’
————————————————————————————————–

By Padmini Arhant – Health Care Snags Drags on…

As noted in the cited article, the victims’ experience is precisely the reason for the requirement on the health care reform to be effective immediately rather than in 2014.

Although, the health insurance industry like other Wall Street behemoths dictate their terms and conditions in every legislation to water down the impact, the legislators still hold the key to an effective and meaningful law on every national issue from financial, energy to health care bills.

It’s not surprising to note the insurance industry representatives’ emphasis on ‘the government mandate to buy insurance,’ to enable the industry compliance with respect to pre-existing conditions and coverage offer to applicants.

The problem lies with the insurance industry’s policy against the mandatory subscribers with pre-existing illnesses and affordability factor for comprehensive quality care even in 2014 and thereafter.

Meanwhile, the insurance industry is determined to continue the status quo with coverage denial and placing subscribers under high-risk pool for minor ailments between now and 2014.

Since it’s a life and death matter, those who are declined coverage by the insurers face the worst possible situations as there is no guarantee to their health care access until the health care legislation becomes the law in 2014.

Despite the expected federal funding increase to the states to address the high-risk pool, the amount projected as inadequate to cover the patients with pre-existing illnesses forcing them to deal with the escalating premium costs in the market for individual subscribers.

That’s why the ideal solution to all of these issues would be to amalgamate the existing federal programs such as Medicare, Medicaid, CHIP, VA, COBRA and establish a “Single Payer” system for a “Universal Health Care” made available now to save life.

Nations thrive with healthy population contributing to a productive and prosperous economy.

It’s never too late to enhance the health care law for health care is a necessity and not a privilege.

Thank you.

Padmini Arhant

Comments

Comments are closed.