Private insurers deny individual coverage based on occupation
Health insurers deny policies in some jobs
Common medications also can be deemed too risky in California.
By Lisa Girion
Los Angeles Times
January 8, 2007
Health insurers in California refuse to sell individual coverage to people simply because of their occupations or use of certain medicines, according to documents obtained by The Times.
Entire categories of workers — including roofers, pro athletes, dockworkers, migrant workers and firefighters — are turned down for insurance even if they are in good health and can afford coverage, according to the confidential underwriting guidelines of four health plans.
Although Blue Cross of California, the state’s top seller of individual policies, does not exclude applicants based on occupation, three others do: Blue Shield of California, PacifiCare Health Systems Inc. and Health Net Inc. Actuarially speaking, they say, certain workers pose too big a risk.
All four health plans look at prescription drug use to decide to whom they will sell individual policies. Dozens of widely prescribed medications — including Allegra, Celebrex and Prevacid — may lead to rejection, according to the underwriting guidelines that the health plans provide to insurance brokers but not to the public.
In fact, eight of the 20 top-selling prescription drugs in the U.S., including No. 1 Lipitor, a cholesterol fighter that racked up $12.9 billion in global sales in 2005, make the lists of two health plans.
“This is something that has been actuarially determined to keep insurance affordable for a very, very broad range of people,” said David Olson, a spokesman for Woodland Hills-based Health Net.
“This isn’t cherry picking; this is ignoring whole orchards of people,” said Jamie Court, president of the Foundation for Consumer and Taxpayer Rights.
Studies show “guaranteed issue can price people out of the market, and, as public policy, it achieves the opposite goal of getting more people insured,” said Shannon Troughton, a spokeswoman for WellPoint Inc., the Indianapolis-based parent company of Blue Cross of California.
“The current system is broken and getting worse,” (Senate President Pro Tem Don) Perata said. “Instead of competing on the basis of cost and quality, we’re seeing health insurers denying coverage to the people who need it the most. This is scandalous.”
The problem with adding even one high-risk member to an insurance plan is that the costs go up for everybody, said Tyler Mason, a spokesman for PacifiCare, a division of Minneapolis-based UnitedHealth Group Inc. “It’s the whole risk-pool thing, and one affecting the hundreds.”
“This is one of the features of our polyglot system of health insurance,” Health Net’s Olson said. Health plans “have different approaches. Our view would be that’s a good thing.”
http://www.latimes.com/business/la-fi-reject8jan08,0,6430685,full.story?coll=la-home-headlines
Comment:
By Don McCanne, MD
Our polyglot system (sic) of health insurance is a good thing? Cream-skimming, cherry-picking policies are great for the insurers since it allows them to maintain their market presence through their ability to offer competitive premiums.
But protecting the markets for private plans is terrible when it is done so by destroying the risk pooling function of insurance. Policies that create intolerable financial burdens for those with health care needs are the opposite of what we should be striving for.
We desperately need an equitably-funded universal risk pool. The private insurers will fight it every inch of the way. Is our ethical obligation to insurers or to patients? Isn’t it time to shove the private insurers out of the way so that we can establish our own public program that actually protects the financial resources of patients?