Why We Need a Public Option

"This is precisely why we need a public option," Representative John Dingell (D-MI) said on Tuesday, June 16 at a Congressional hearing with top insurance executives about the health insurance company practice of cancelling policies retroactively to avoid paying claims.

The insurance executives were: Richard A. Collins, chief executive of UnitedHealth’s Golden Rule Insurance Co.; Brian Sassi, president of consumer business for WellPoint Inc., parent of Blue Cross of California; and Don Hamm, chief executive of Assurant Health.

Dingell, however, falls short of pushing for the single payer health insurance program favored by a majority of Americans. In a statement released June 24 Dingell said, "This discussion draft is NOT an attempt to create a single payer system nor is it a first step towards a single payer system."

On June 16, Representatives Bart Stupak (D- MI) and Joe Barton (R-TX) pressed the health insurance officials for more information about cancellation procedures.

Representative Barton said, "I think a company does have a right to make sure there’s no fraudulent information. But if a citizen acts in good faith, we should expect the insurance company that takes their money to act in good faith also."

Stupak, the committee chairman, said, "When times are good, the insurance company is happy to sign you up and take your money in the form of premiums. But when times are bad … some insurance companies use a technicality to justify breaking its promise, at a time when most patients are too weak to fight back."

The Los Angeles Times reported, "An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period."

A few American citizens who were victims of retroactive cancellation presented the following facts. A lady from Texas lost her health insurance coverage after she was diagnosed with breast cancer. The reason for cancellation was that she had failed to disclose a visit to a dermatologist for acne. Another lady was cancelled for failing to report that she had once taken weight-loss medication and had irregular menstruation.

The executives found themselves on the defensive with a very, very weak defense.

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Would you offer coverage to people to have preexisting conditions?

Health Insurance Employees Rewarded for Cancellations

The committee discovered employee performance documents that showed Blue Cross employees were rewarded for cancelling health insurance policies. One employee received a perfect 5 indicating exceptional performance for cancelling thousands of policies and saving the company over $10,000,000 in claim payments. Unfortunately, this is not new.

In 2007, HealthNet was fined $9,000,000 for such practices. At the time, it was discovered that HealthNet had avoided paying $35,000,000 in claims by retroactively cancelling health insurance policies. At the time, Blue Cross stated they did not tie employee performance to policy recission, a fact turned on its ear with the 2003 employee evaluations that showed Blue Cross had lied.

This is the system Congress thinks it can fix with a bandaid approach? No, this is the system that demands a government sponsored single payer health insurance option is the only option to true health insurance reform.

More About Health Insurance Reform

Sen. Blanche Lincoln Co-sponsors SHOP

Sen. Blanche Lincoln Opposes Public Option

Single Payer Health Insurance for America

Public Insurance Option is Not Optional

Medical Bankruptcy Shows Broken Health Care

Single Payer Health Insurance in Trouble

Single Payer Health Insurance Ignored

What others are saying about Single Payer Health Insurance

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