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Fox
Joined: 04 Mar 2009
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 Posted: Fri Mar 19, 2010 1:54 am Post subject: Ins. Company Made Policy of Accusing HIV Patients of Fraud |
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Article here.
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(Reuters) - In May, 2002, Jerome Mitchell, a 17-year old college freshman from rural South Carolina, learned he had contracted HIV. The news, of course, was devastating, but Mitchell believed that he had one thing going for him: On his own initiative, in anticipation of his first year in college, he had purchased his own health insurance.
Shortly after his diagnosis, however, his insurance company, Fortis, revoked his policy. Mitchell was told that without further treatment his HIV would become full-blown AIDS within a year or two and he would most likely die within two years after that.
So he hired an attorney -- not because he wanted to sue anyone; on the contrary, the shy African-American teenager expected his insurance was canceled by mistake and would be reinstated once he set the company straight.
But Fortis, now known as Assurant Health, ignored his attorney's letters, as they had earlier inquiries from a case worker at a local clinic who was helping him. So Mitchell sued.
In 2004, a jury in Florence County, South Carolina, ordered Assurant Health, part of Assurant Inc, to pay Mitchell $15 million for wrongly revoking his heath insurance policy.
In September 2009, the South Carolina Supreme Court upheld the lower court's verdict, although the court reduced the amount to be paid him to $10 million.
By winning the verdict against Fortis, Mitchell not only obtained a measure of justice for himself; he also helped expose wrongdoing on the part of Fortis that could have repercussions for the entire health insurance industry.
Previously undisclosed records from Mitchell's case reveal that Fortis had a company policy of targeting policyholders with HIV. A computer program and algorithm targeted every policyholder recently diagnosed with HIV for an automatic fraud investigation, as the company searched for any pretext to revoke their policy. As was the case with Mitchell, their insurance policies often were canceled on erroneous information, the flimsiest of evidence, or for no good reason at all, according to the court documents and interviews with state and federal investigators.
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Insurance companies have long engaged in the practice of "rescission," whereby they investigate policyholders shortly after they've been diagnosed with life-threatening illnesses. But government regulators and investigators who have overseen the actions of Assurant and other health insurance companies say it is unprecedented for a company to single out people with HIV.
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Fortis canceled Mitchell's health insurance based on a single erroneous note from a nurse in his medical records that indicated that he might have been diagnosed prior to his obtaining his insurance policy. When the company's investigators discovered the note, they ceased further review of Mitchell's records for evidence to the contrary, including the records containing the doctor's diagnosis.
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CEO DEFENDED RESCISSION
On June 16, 2009, the House Energy and Commerce Committee, held a hearing on the practice of rescission by health insurance companies, and among the industry executives who testified was Don Hamm, the CEO and President of Assurant Health.
Hamm insisted before the committee that rescission was a necessary tool for Assurant and other health insurance companies to hold the cost of premiums down for other policyholders. Hamm asserted that rescission was "one of many protections supporting the affordability and viability of individual health insurance in the United States under our present system."
He also suggested that those who had their policies rescinded by Assurant had attempted to intentionally mislead his company: "Unfortunately, there are times when we discover that an applicant did not provide complete or accurate medical information when we underwrote the risk," Hamm said.
But state regulators, federal and congressional investigators, and consumer advocates say that in only a tiny percentage of cases of people who have had their health insurance canceled was there a legitimate reason. |
This young man did everything right. He behaved responsibly, he did nothing wrong, he behaved with integrity and even gave his insurance company the benefit of the doubt when it tried to screw him. By comparison, the insurance company outright stated it has a policy of trying to screw anyone who comes down with a serious disease, most particularly those with HIV. It happily accepts payment from anyone without question... until it comes time to pay out, in which case it finds any possible excuse to strip them of their coverage.
This isn't a secret. It's not some conspiracy. We all know this happens, and we all know it's unavoidable. As a private entity, health insurance profits are the direct result of screwing people over. That's how they make money. It's the only possible way for them to make money in any reasonable quantity. |
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Senior
Joined: 31 Jan 2010
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| Posted: Fri Mar 19, 2010 2:26 am Post subject: |
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They could probably afford to not screw people over, if they weren't mandated to cover every single ailment and mal-ease. The insurance companies don't make huge amounts of money. They, for the most part have razor thin profit margins.
Not taking anything away from this case of course. They were crooks and were caught. Though, it would surprise me if they noticed 10 mil here or there. They probably made that up in the people they threw off who didn't sue. This is an obvious case of corruption. This is identical to the Grisham novel, The Rainmaker. Good movie, too
However, I don't believe the problem to be with health insurance itself. It's the distorted way that health insurance is regulated that is the problem. I know you believe otherwise, but socialised health care is no picnic, either. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Mar 19, 2010 5:43 am Post subject: |
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Insurance isn't an appropriate tool for health funding.
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| They, for the most part have razor thin profit margins. |
William McGuire from United Health 'earned' a 1 billion dollar bonus a few years back.
The profit margins are after these shenanigans. McGuire's bonus might be the most nominally absurd compensation but it exists in a sea of crap.
Though you're right, in a sense. If these firms are forced to take sick people they will become less profitable and ergo forced to raise premiums. I know this isn't the topic of the OP but Obama's health plan is bunk. |
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