Friday, April 28, 2006

It's good to be an oil company, but, even though the numbers aren't massive, it's also pretty swell to sell health insurance:

WellPoint profits show sizzle in first quarter

How long can WellPoint and other health insurers match the stellar profit growth of recent years? ...

WellPoint, the nation's largest health-benefits company, on Wednesday reported net income of $731.8 million, or $1.09 a share, for the first quarter ending March 31. That's up 20 percent from net income of $611.7 million, or 98 cents a share, from a year ago....

But some of WellPoint's profits appear to stem from this:

Two years ago, Riverside resident Dawn Foiles needed treatment for a ruptured disc in her neck.

Last spring, Rancho Cucamonga resident Estelia McDonald had to have treatment for kidney stones.

Both were insured by Blue Cross of California, which authorized the women's medical procedures.

According to lawsuits, the company, later, illegally rescinded coverage retroactively leaving the two with costly bills....

Similar actions against eight others prompted additional lawsuits against Blue Cross, Life & Health Insurance Co. -- which issued the policy -- and their parent company, Wellpoint Health Networks Inc....

When she filled the application, Foiles admitted to having back surgery in 1997. After disc problems flared in her lower back and neck in 2004, Blue Cross authorized payment of more than $100,000 in medical procedures and related services, she said.

But in April 2005, Foiles received notice that not only was she being dropped, but the company was not going to pay any outstanding bills. The cancellation was reportedly based on her pre-existing back surgery, despite the fact that she included it in her questionnaire, she said.

"It has destroyed us," said Foiles....

Got that? The company approved her for surgery. Then, 100 grand in medical bills later, it canceled her coverage retroactively.

The number of people who are now suing is up to 23. And it looks as if this is no oversight:

According to the lawsuits filed today, WellPoint and Blue Cross of California have created "retroaction review" departments whose sole purpose is to terminate policies for patients who had previously been given approval for medical treatments....

Under state law HMOs and insurers are prohibited from revoking coverage after claims have been filed ... unless they can show that patients intentionally withheld past medical conditions. According to [the] Los Angeles Times yesterday, in a previous case against the company, a Blue Cross employee admitted that the company routinely canceled policies of sick members after looking for inconsistencies -- not fraud as required by law -- in their applications.

I'm sure Republicans would describe these as "junk lawsuits," but what other leverage do these people have? Meanwhile, the insurance companies, like the oil companies, make great money off something we can't live without. Folks, it ain't a "free market" if the buyer and seller are in such vastly different power positions.

(Inspired by a story on last night's CBS News.)

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