OK, so it’s a terrible and stolen pun but Wellpoint’s recent history is getting more and more bizarre. First they become the poster child for the recissions scandal (even if not the worst offender)—which eventually helped push the “evil insurer meme” which helped health care reform along its way.
Then they helped kill Arniecare, and tried hard to kill Obamacare, all the while being a fringe member of the AHIP coalition which actually wanted health reform. And they managed to both showcase a bizzaro interview with CEO Angela Braly and then ended up pouring gasoline on the fire dying embers of health reform in late February, early March by their crass mismanagement of their individual market business —which apparently required increases of 39% despite their alleged excellence at accurate market pricing.
Now we have a new article from Reuters who are zeroing in on the actual way that Wellpoint went after cancer patients with the aim of figuring out if there was any reason to cancel their coverage. It’s pretty unsavory stuff, but everyone knows from Lisa Girion’s reporting that this stuff was going on with all California insurers and most everyone else who could get away with it.
But is there anything new in this report? Well I guess the most interesting data is the date. The recission scandal blew up in March 2006. Here’s a cool article written by little ol’ me about it in my then column in Spot-on.
We all kind of assumed that this stuff was going to stop when all the plans agreed to behave better, as they all, including Wellpoint, did in California (with the exception of Blue Shield) by the end of 2007
What Reuters found in the long version of their report (which is tough to find online BTW and well worth looking at) is that the naughty stuff continued all the way up until last year. In fact misrepresentation is now not the reason for one of the worst cancellations—it was apparently failing to answer a question to a letter that apparently wasn’t received.
This really doesn’t pass the sniff test. If that information was really important—as it clearly was to the patient—surely Wellpoint has other ways of tracking it down, and finding out the truth. And this happened in the middle of 2009.
You might imagine that with the spotlight on them, Wellpoint would figure out a way to do better. As I have noted numerous times, it’s not like the result of all this has been them doing a fabulous job restricting health care costs for their employer and individual clients.
So this really does beg the question, societally, what exactly is the point? George Soros said this about Goldman Sachs today in the FT. Just read it and think about the role of Wellpoint in today’s system. Do they remind you of Goldman?
Whether or not Goldman is guilty, the transaction in question clearly had no social benefit. It involved a complex synthetic security derived from existing mortgage-backed securities by cloning them into imaginary units that mimicked the originals. This synthetic collateralized debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions
Categories: Matthew Holt