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A few months ago, there was great hope that the Department of Managed Health Care was going after the big insurance companies on the rescission of individual policies. The DMHC is an executive department, and thus reports to Arnold, not to the Insurance Commissioner (Poizner). So, a few weeks ago we got the news that the DMHC called off the dogs against Blue Cross because they knew Blue Cross would just litigate them to death. Or something like that.
I know, it's shocking that Arnold's administration wouldn't pursue a corporation, but they thought it better just to let BC get off on that charge and settle with them elsewhere. Ther problem with that? The settlement that the DMHC agreed to with the biggest five insurers in the state is barely a slap on the wrist. The new procedure requires patients to go through a vague arbitration procedure where they have to prove their case.
Mind you the arbitrator will see far more of the insurance companies than the patients. Where do you think this is going? Yup, just like other arbirtration settings this is going to end up favoring the big company. By the by, that link above states that 99.8% of the cases filed by consumers against credit card companies decided on the merits end up with the company winning. 99.8%! That's a track record minor deities wouldn't mind. And even when they get to the arbitrators, cases under $15,000 will typically be decided on the paperwork only. Furthermore, the settlement doesn't define any legal standards for these decisions, but it appears the legal burden of proof is on the patient to prove he didn't lie rather than the insurer to prove they did.
This is no victory at all. And that's part of why LA City Attorney Rocky Delgadillo filed suit against Blue Shield in mid-July.
"For decades, health insurers have gamed the system and reaped billions," Delgadillo said. "The time has come to . . . set things right."
The suit also accuses Blue Shield of falsely advertising its coverage, alleging that the company often reneges when its members need substantial medical care.
Dr. Richard Frankenstein, president of the California Medical Assn., and Dr. Robert Bitonte, president-elect of the Los Angeles County Medical Assn., praised Delgadillo's efforts to stop the practice known as rescission. (LAT 7.17.08)
Single-payer (likely at the national level) is the ultimate solution, but meanwhile, back in reality land, the insurers are getting off scott free. If the DMHC is going to claim to do its job, it can't leaving gaping loopholes like this. Delgadillo and other attorneys will have to press the insurance companies for every last concession, because they're not giving anything away for free. |
