Why we passed health care: WellPoint and breast cancer

Reuters has a terrific investigative piece on WellPoint’s practice of canceling health insurance, a practice known as rescission. When a woman develops breast cancer, WellPoint immediately flags her for investigation to see if there’s some reason her policy can be canceled. Grounds for cancellation can be anything on the original insurance application that appears to be an omission or misrepresentation.

The grounds for cancellation are often flimsy at best. A 2007 California investigation of a WellPoint subsidiary looked at 90 randomly selected cases of dropped insurance. There wasn’t a single case where the evidence indicated the applicant had intentionally omitted or misrepresented anything.

WellPoint’s cancellation practices also apply to women who become pregnant:

“It’s not like these companies don’t like women because they are women,” says Jeff Isaacs, the chief assistant Los Angeles City Attorney. … “But there are two things that really scare them and they are breast cancer and pregnancy. Breast cancer can really be a costly thing for them. Pregnancy is right up there too. Their worst-case scenario is that a child will be born with some disability and they will have to pay for that child’s treatment over the course of a lifetime.”

WellPoint prides itself on having female executives and on promoting women’s health – by calling with reminders for mammograms, for example. Doesn’t it seem a bit schizoid then to automatically investigate every woman diagnosed with breast cancer?

Research professor Karen L. Politz comments: “It is important for these companies’ profit margins that they get rid of policyholders with expensive diseases. … If one company were to stop, it would no longer be competitive with the others. They argue they have to do this to stay in the game.”

Isn’t the health care bill supposed to stop this?

Theoretically, yes, but the insurance industry was successful in eliminating certain provisions. An early version of the bill included a Federal Office of Health Insurance Oversight that would have monitored and regulated practices like rescission. “WellPoint lobbyists pressed for the proposed agency to not be included in the final bill signed into law by the president. They also helped quash proposed provisions that would have required a third party review of its or any other insurance company’s decision to cancel a customer’s policy.”

The battle against unfair and unethical insurance practices is not yet over, however. The health care bill is merely a roadmap. Government agencies must now pass regulations that will enforce the bill’s intentions. A senior official in the Obama administration, speaking on condition of anonymity, said he was optimistic about requiring third party reviews of rescission. “It might take some wrangling with the insurance industry, some strong-arming, maybe even use of the presidential bully pulpit.” But it’s still in the administration’s sites.

Nancy Pelosi and WellPoint respond

Nancy Pelosi promptly responded to the Reuters story and took the opportunity to include a swipe at Republicans.

WellPoint’s practice of dropping anyone’s coverage when they get sick – whether a woman with breast cancer or any other patient – is exactly the kind of insurance company abuse our new health care law prohibits.

Soon every American can be secure knowing that their insurance companies cannot cancel their coverage because of an illness.

And when Republican leaders call for repeal of the health reform law, they are endorsing a return to these abusive policies that have no place in our medical system.

WellPoint also responded with a vigorous defense, denying many of the article’s claims. Breast cancer patients are not targeted, according to WellPoint. The article misunderstands the use of computer algorithms and mischaracterizes WellPoint’s lobbying efforts against reform. Not mentioned is the 2007 California investigation of 90 randomly selected cases of rescission that found all cancellations without merit.

In a climate of truthiness everything is suspect

WellPoint may have a hard time getting its side of the story heard. The blogosphere is already foaming at the mouth. The Consumerist: “Is it too late for WellPoint to get into the Worst Company In America competition?” Health Care for America Now: “WellPoint is committing murder by spreadsheet, and it has to stop now. This is a matter of life and death, and the executives and board members of WellPoint need to be held to account to the fullest extent of the law.”

Undoubtedly this story will pass through several rounds of accusations and denials over the next few news cycles. The liberal media will focus on what’s outrageous. Conservative media may feature WellPoint’s denials, but maybe not. Barring further congressional hearings under oath, we may never know the truth.

Insurance companies, pharmaceutical companies, device makers, Wall Street, corporate America, big government …. There’s enough anger out there to satisfy everyone’s paranoia. Which is not to say the Reuters story isn’t true. In a climate of truthiness, however, everything becomes suspect. For most people these days, what’s true is what they most want to believe. How unfortunate is that?

UPDATE: Letter to WellPoint CEO Angela Braly from Kathleen Sebelius, Secretary of Health and Human Services.

Related posts:
The Economist reviews Kaiser Permanente health care
Why health insurance isn’t there when you need it most
Acne, allergy, and toe nail fungus make you uninsurable
Congress finds health insurance industry fundamentally flawed
A health insurance executive changes sides
Health insurance insider speaks out
Your insurance industry at work
A reason not to marry: Medical bankruptcy


(Links will open in a separate window or tab.)

Murray Waas, WellPoint routinely targets breast cancer patients, Reuters, April 22, 2010

Pelosi Statement on Reports That WellPoint Is Targeting Breast Cancer Patients, PRNewswire, April 22, 2010

WellPoint’s Reuters Response, PRNewswire, April 22, 2010

David Dayen, HCAN on WellPoint: “Murder By Spreadsheet”, FireDogLake, April 22, 2010

Chris Morran, Report: WellPoint Targeted Then Dropped Breast Cancer Patients, The Consumerist, April 22, 2010

Jane Hamsher, Wellpoint Lobbyists Axed Key Protections for Breast Cancer Patients from Health Care Bill, HuffingtonPost, April 22, 2010

Report: WellPoint Targets Breast Cancer Patients with Policy Rescissions, Kaiser Health News, April 22, 2010

Breast Cancer Patients Deliberately Dropped by WellPoint Insurance Company, Women on the Web, April 22, 2010


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