MERCHANTS OF DEATH ... YOU DIE, I GET RICH

Want to know why we need health care reform? Check out this story, courtesy of Paul Krugman …

Reuters published an investigative report this week that powerfully illustrates the vileness of our current system. The report concerns the insurer Fortis, now part of Assurant Health, which turns out to have had a systematic policy of revoking its clients’ policies when they got sick. In particular, according to the Reuters report, it targeted every single policyholder who contracted H.I.V., looking for any excuse, no matter how flimsy, for cancellation. In the case that brought all this to light, Assurant Health used an obviously misdated handwritten note by a nurse, who wrote “2001” instead of “2002,” to claim that the infection was a pre-existing condition that the client had failed to declare, and revoked his policy.

This isn’t an isolated incident, or a case of a few bad apples in a rogue claim denial department. It occurs on a regular basis, with claim denials ranging from 2-7 percent in the health insurance industry. 

There’s a reason why this goes on. Simply put, it pays.

As Krugman points out a House committee estimated that “Assurant made $150 million in profits between 2003 and 2007 by canceling coverage of people who thought they had insurance”. This amount is a kingly sum compared to what the firm pays in fines and settlements over time. This means private health insurance companies have calculated that denials and settlements are more lucrative and important than actually paying for services that medical doctors assign, and clients have paid for with their premiums.

No wonder Republicans were able to jump on the "death panel" issue so quickly. They've had their Grim Reaper Model for years.

In many ways, when it comes to the economics of medical care denial, private health insurance companies have turned it into a science and, in the process, become pseudo merchants of death. But unlike the arms industry, who don't hide the fact that their product will lead to pain and suffering, the insurance industry will sell you a product and lie to you about the final outcome.

- Mark