MAKE YOU FEEL...

MAKE YOU FEEL SAFER? One of the recurrent questions I get on panels, call-in shows, and e-mails is "What will be required to change the health care system? What can be done?" It's not a query I'm particularly well-equipped to field, but I think a good start would be photocopying this article on retroactive cancellations by insurers and handing a copy out to each and every American. No other piece I'm aware of exposes the absurdities and cruelty of the system as clearly, and so irresistibly signals the need for reform.

The actual facts in the report are basic: California state regulators are investigating Blue Cross for unlawful cancellations of policies. When you buy individual coverage, unlike when you buy into group coverage, insurers can reject you based on your health history or conditions. In order to protect against fraud -- say, someone being diagnosed with heart disease, then applying for insurance the next morning without mentioning it -- the law allows for insurers to cancel policies if the applicant engaged in "willful misrepresentation." What's clever is how the insurance industry has redefined the standard: If you had a condition you didn't know about, they'll seek to not only yank your policy, but dispatch debt collectors to recover what they've already paid out.

In practice, the scam works like this: Selah Shaeffer, age four, was found to have an aggressive, cancerous tumor in her jaw. The family had been with Blue Cross for about a year, and the bump was examined and biopsied after they'd bought their insurance. But because it was growing before, Blue Cross cut off reimbursement for surgeries it had already authorized, and is now trying to recover $20,000 from the Shaeffers. Or take the Nazertyans, who had premature twins. They were covered by Blue Shield all throughout the pregnancy, and disclosed all facets of the birth and operations. Blue Shield not only dropped them, but was trying to get back $98,000 they'd already paid under the rationale that the Nazertyans hadn't disclosed an earlier miscarriage. After the Los Angeles Times reported the story, Blue Shield called off the debt collectors.

What's so remarkable about all this is what it exposes about the health insurance system in this country: We rely almost exclusively on private insurers whose primary business imperative is not to pay when we get sick. They do that by seeking to deny coverage before the fact, or reject claims afterwards. They pay for platoons of employees who have no job other than to scrutinize thousands of policies a week in the hopes of finding sufficient cause for cancellation. Say what you will about the inefficiencies of the public sector, but can it really match the ruthlessness and absurdity of insurers spending large amounts of money so they don't have to insure? Is that sort of profit motive really what you want underlying your health care coverage?

--Ezra Klein

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