Insurance Fraud

When Barack Obama made the election promise of ambitious health-care reform in his first year in office, anyone who had paid attention to the issue would have predicted that the battle would be fierce. But one of the most curious developments of this debate has been that the group one would have thought would be leading the charge against reform – the health-insurance companies – has largely stayed quiet. They haven't aired attack ads, as they did in 1993, nor have they sent their representatives to the talk shows to blast the president and his efforts.

Before we start rethinking whether the insurance companies are as malevolent as they've been made out to be (spoiler alert – yes, they are), it's worth noting just how remarkable their relative absence from this debate has been. Whatever else you can say about them, they're not the ones whipping up fear of "death panels," or comparing Obama to Hitler, or screeching about "socialized medicine." In fact, if you didn't know about their history, you might think they've been desperately hoping for positive change.

When the industry does raise its head, it poses not just as an advocate for reform but as an opponent of its own abuses. Witness this television adfrom America's Health Insurance Plans (AHIP), the insurance company lobby, which must surely stand as one of the most shamelessly hypocritical pieces of advertising in American political history:

"Illness doesn't care where you live," the narrator says sympathetically, "or if you're already sick, or if you lose your job. Your health insurance shouldn't either." The ad ends with the hope that "the words ‘pre-existing condition' [become] a thing of the past." So say the people who won't insure you if you have a pre-existing condition and who will cut you off if you get a serious illness. It's kind of like a gang of home invaders expressing the fervent hope that people will get better alarm systems and stronger deadbolts.

What's going on? In simple terms, they cut a deal. It may not be written down on paper, but it goes like this: If the government imposes an individual mandate, forcing all Americans to buy health insurance – and thus guaranteeing us millions of new customers – we won't stand in the way of new regulations curbing some of our worst abuses. And this is their defense when those abuses are brought up. We've already agreed to those new regulations, they'll say, so why do we need to talk about it anymore? Let's just make sure there's no public option people can choose, because that would just be a step too far.

But here's a question: If the insurance companies have finally come to understand that it's wrong to kick people off their coverage when they get sick; and it's wrong to deny coverage to people who have previously been sick; and it's wrong to hide lifetime limits in the fine print, forcing people into bankruptcy if they face a serious illness; and it's wrong to discriminate against pregnant women and their families; why don't they stop doing these things? Like, how about today? Why are they waiting for Congress to outlaw their most abominable practices?

They won't do that, of course. They're hoping to squeeze every dollar they can out of patients in the current system, up until the last possible day they can. And things are going great for them at the moment. According to the Kaiser Family Foundation, the average premium for a family plan in 1999 was $5,791. By 2008, the average premium was $12,680. So over a decade in which inflation increased prices by 29 percent, the price of family health insurance went up 119 percent. UnitedHealth, probably the most despicable of America's health insurers (look at any health-insurance industry scandal, and UnitedHealth is likely leading the way) just announced that in the second quarter of 2009, they made a profit of $859 million, every dollar squeezed from patient premiums and through the avoidance of what the industry calls "medical losses," meaning when they reluctantly pay for care.

So somewhere today, a family is being told by one insurer after another that they can't have coverage because of their pre-existing conditions. Somewhere today, a woman who was just diagnosed with cancer has been informed that her insurer is dropping her from her plan, because when she got the diagnosis, they began an investigation of her to see if they could come up with a pretext for kicking her off, and they struck gold when they discovered she forgot to tell them about a years-ago visit to a dermatologist for acne. Somewhere today, a family is filing for bankruptcy, because even though they had insurance, once one of them got sick, they quickly reached their "lifetime cap" of coverage, so the company to which they've dutifully paid premiums will no longer pay for their care. Somewhere today, a couple celebrating the birth of their child just got a call from a collection agency, because even though they had insurance, the fine print of their plan contained a series of riders detailing how the insurance company will essentially refuse to pay for all but a tiny portion of the costs of a pregnancy (read Sarah Wildman's horrifying and revealing tale of how her insurance company did this to her).

So if the insurance industry really wants to demonstrate its good faith on health-care reform, here's what it could do: End these practices now. Don't wait to see what's in the final bill. Do it now. Stop denying coverage for pre-existing conditions. Stop rescinding the policies of people who get sick. Let people keep their coverage when they leave a job if they keep paying the premiums. Stop discriminating against pregnant women. You want to atone for your sins? Changing these policies would be a good place to start.

A final note: The one provision the insurance industry has been fighting tooth and nail is the inclusion of a public option. Their argument -- one that is echoed by their conservative allies -- is that any public plan would inevitably (by what mechanism they never say) drive the good-hearted insurance companies out of business, leaving people with an oppressive single-payer government health-insurance system. So I hereby challenge not just any insurance company representative but any conservative officeholder (current or former – I'm looking at you, Sarah and Newt), political professional, activist, pundit, or regular person who complains about the terrifying specter of government-run health care, to take the following pledge: When I become eligible at age 65, I will refuse health coverage under Medicare. After all, Medicare is an awful single-payer, big-government program, and we know they want no part of that. So who's going to take me up on it? Anyone?

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