The LA Times roars out of the gate this morning with a searing article on insurance industry underwriting and the many insignificant ailments that will lead insurers to simply refuse you any and all coverage.
Jerry Flanagan, an advocate with the Foundation for Consumer and Taxpayer Rights, said it wouldn't take much to be left out of the private-insurance market. "A minor asthma condition or a surgery 10 years ago that requires no further medical care is enough to get you blacklisted forever," he said.
As a result, some people forgo treatment so as not to tarnish their health records. Others withhold information from doctors or ask them to leave details out of their records. For those who are uninsurable, healthcare often is the chief reason they stay in or take a certain job.
Claudine Swartz enjoyed running her own consulting business but had been rejected for individual insurance. After a scare over a benign cyst in her breast, the San Francisco resident closed her business and got a job with the University of California's health system, where she enjoys guaranteed coverage.
The episode made her realize that without insurance, she would have been on the hook for catastrophic expenses if her diagnosis had been more serious.
"I wasn't willing to take that risk," said Swartz, 35. "It's a real problem for people trying to be entrepreneurial and work on their own."[...]
Insurers declined to disclose the underwriting guidelines that lead to rejection or higher premiums. But a review of public records, as well as rejection letters sent to individuals, shows that California carriers turn people away or charge them higher premiums for conditions that range from the catastrophic to the common. Cancer, epilepsy and AIDS make the list, along with breast implants, ear infections, varicose veins and sleep apnea.
Jeffrey Miles, a vice president of the California Assn. of Health Underwriters, a trade group for independent insurance agents, said one of his clients — a 27-year-old woman "in perfect health with absolutely nothing wrong" — was rejected because she had seen a psychologist for three months after breaking up with a boyfriend.
"I call it hangnail underwriting," Miles said. "If a person has taken virtually any medication, they are going to be turned down. If people have had any psychological counseling at any time in recent history, they are going to get turned down."
Swartz, the consultant, said the reason she couldn't get individual coverage was a condition in her records that she may never have actually had. Her physician had diagnosed ulcerative colitis. But after years without additional symptoms, Swartz said, her doctor decided the initial diagnosis was probably wrong.
Consumer advocates say out-of-date, ambiguous and even erroneous medical information can render people uninsurable. Sometimes the reasons can seem absurd. In a letter to an otherwise healthy recent college graduate, for instance, Blue Cross listed among the reasons it denied coverage a past bout of jock itch, "successfully treated with cream."
Community rating -- forcing insurers to insure everyone at the same price, and barring them from rejecting any applicant -- ends this practice. Which is why it's a non-negotiable element of any serious reform plan. But anyway: Happy New Years. My resolution? To keep working towards a better, fairer, more just system.
