Denial of coverage leads to big profits for insurers

Health insurance companies make staggering profits by denying coverage to people who need health care. Premium costs rise and coverage shrinks. When corporate greed trumps human suffering, it is time to regulate the villains.

Health insurance company profits are obscene. WellPoint, parent company of Blue Cross, earned $3.09 billion in profits in 2007, a 25.6 percent increase since 2005. UnitedHealth garnered a $4.16 billion profit, a 25 percent increase since 2005. UnitedHealth and WellPoint made the top 25 most profitable Fortune 500 list — great for shareholders — but the ethically bankrupt profits were raked off the backs of U.S. families.

Since 2000, employment based health insurance premiums have increased 100 percent, compared with cumulative inflation of 24 percent, and wage growth of 21 percent for the same time period. In 2007, premiums rose 6.1 percent.

Employers struggle to afford insurance premiums and pass on a larger percentage of costs to employees while offering health plans that cover less care. Employers can offer health insurance, but premiums are too high for some employees to afford. In Washington, 79 percent of uninsured families have at least one person who works either full or part time.

Health insurance companies love to deny coverage for pre-existing conditions and cancel coverage when enrollees become injured or ill. In February, the Los Angeles Times broke a story about Blue Cross. The company sent letters to California physicians asking them to report patient conditions so it could use the information to cancel coverage for new enrollees, telling doctors Blue Cross had the right to drop patients with pre-existing conditions.

Blue Cross (and other health insurance companies) had been sending those letters out for years. The Los Angeles Times report sparked a large public outcry; physicians were particularly outraged with Blue Cross's attempts to intrude on patient privacy. Blue Cross agreed to stop sending letters to doctors in California.

Blue Cross of California also was investigated after lawsuits claimed the company had a special department set up to systematically look for any excuse to refuse coverage for large claims. Investigation revealed that Blue Cross has personnel assigned to uncover potential misinformation on applications. Blue Cross sits on discovered problems and continues to collect premiums unless the enrollee makes a large claim. When the enrollees' claims exceed the collected premiums, Blue Cross cancels or rescinds the policy.

The California Department of Managed Care imposed a $1 million dollar fine after investigations revealed systemic problems in the way Blue Cross/Blue Shield rescinds coverage.

Even with coverage, family finances might still crumble when illness or injury strike. About half of all personal bankruptcy cases are because of health costs. Every 30 seconds, a U.S. resident files for bankruptcy related to health care expenses and more than three in four have health insurance.

Americans believe every citizen has the right to fire and police protection and public education. Now we must say every citizen has the right to affordable health care.

To bring health care costs down, health insurance must be brought under strict regulation. Other countries with multiple insurance companies have intervened successfully. Let's outlaw limitations based on pre-existing conditions. Insurers should not be able to rescind coverage after a claim, collect outrageous premiums or deny coverage to those who need it most. We can no longer tolerate the way health insurance companies abuse the families of our community.

Pat Justis worked in health care for 23 years before becoming a freelance writer, photographer and consultant. A member of The Olympian's Board of Contributors, she can be reached at pat@patjustis.com.