Jon Cohn notes that Wendell Potter, a former PR executive with Cigna and Humana. will be appearing before a Senate Commerce Committee today. Note the word “former”.
Trudy Lieberman has an interview with Potter where he repeats what we already know:
Lieberman: How do companies manipulate the medical loss ratio?Potter: They look at expensive claims of workers in small businesses who are insured by the company, and the claims of people in the individual market. If an employer-customer has an employee or two who has a chronic illness or needs expensive care, the claims for the employee will likely trigger a review. Common industry practice is to increase premiums so high that when such accounts come up for renewal, the employer has no choice but to reduce benefits, shop for another carrier, or stop offering benefits entirely. More and more have opted for the last alternative.
Lieberman: What tactics do they use in the individual market?Potter: They rescind policies when a review indicates that an individual has filed a lot of expensive claims. They will look for conditions that were not disclosed on the application. Often the policy likely will be canceled and the individual left without coverage. Sometimes people aren’t aware that they have a pre-existing condition. It might be listed in the doctor’s notes but not discussed with the patient.
Lieberman: One way to end this practice might be to regulate it out of existence. Can we count on the industry to submit to more stringent regulation?Potter: The industry says it will accept more regulation, but the evidence is that it flaunts regulation on the books now. Insurers are often cited for violations of many state regulations, and they usually agree to settle with insurance commissioners or the attorney general and pay a fine. Fines are the cost of doing business, and even if the fine is several million dollars, it is inconsequential compared to profits insurers make.
Last week there was a Congressional hearing on recissions that Bob L noticed, Lisa Girion noticed, Karen Tumulty at Time noticed, even Paul Begala noticed and which the rest of America’s media (including the NY Times for which I could not find ONE mention of the word recission in a search for the last 12 months) ignored. But it essentially showed that in the absence of serious regulatory change AND enforcement, plans will continue to behave badly/maximize their self-interest. And screw over insurees.
The real question is whether the Wellpoints and Humanas of the world will behave well if we get the regulatory change we need—and that’s a huge if. Or if the for-profit nature of their DNA means that we need a wholly different structure of plan. And yes, I’m not a single payer advocate, as I am in favor of intermediaries between the universal insurance pool and providers. But I tend to think that cooperatives would be better for that than large health insurers, although I’m not sure we can all move to Seattle!
But aside from Assurant, Golden Rule & Tonik (who are not even saying the right thing), it’s clear that the majority of health plans are saying one thing about the future they want and doing another to maximize profits in the present they’re in. The question really though is, why aren’t we hearing more about how bad they’ve been?