Tuesday, September 8, 2009
LOS ANGELES -- The untimely disappearance of Sally Marrari's medical coverage goes a long way toward explaining why insurance companies are cast as the villain in the health-care reform drama.
"They said I never mentioned I had a back problem," said Marrari, 52, whose coverage with Blue Cross was abruptly canceled in 2006 after a thyroid disorder, fluid in the heart and lupus were diagnosed. That left the Los Angeles woman with $25,000 in medical bills and the stigma of the company's claim that she had committed fraud by not listing on a health questionnaire "preexisting conditions" Marrari said she did not know she had.
By the time she filed a lawsuit in 2008, she also got a diagnosis of pancreatic cancer and her debts had swelled beyond $200,000. She was able to see a specialist by trading office visits for work on the doctor's 1969 Porsche at the garage she owns with her husband.
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Rescission -- the technical term for canceling coverage on grounds that the company was misled -- is often considered among the most offensive practices in an insurance industry that already suffers from a distinct lack of popularity among the American public. Tales of cancellations have fueled outrage among regulators, analysts, doctors and, not least, plaintiffs' lawyers, who describe insurers as too eager to shed patients to widen profits. ...
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In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.
"This is probably the most egregious of examples of health insurers using their power and their resources to deny benefits to people who are most in need of care," said Gerald Kominski, associate director of the Center for Health Policy Research at the University of California at Los Angeles. "It's really a horrendous activity on the part of the insurers." ....
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