A BUZZFLASH NEWS ANALYSIS
by Meg White
After President Obama spent Monday wooing the American Medical Association in Chicago, the healthcare story in the media turned swiftly to the conflict between doctors, who don’t want to take a pay cut, and Democrats, who want to get the government involved in providing cheaper health insurance coverage to uninsured Americans.
But at a hearing convened by the House Energy Committee’s Subcommittee on Oversight and Investigations titled “Terminations of Individual Health Policies by Insurance Companies,” the more harrowing healthcare conflict between patients and insurers came into full view.
That’s not to say doctors weren’t involved. The two committee members who touted their real-world experience as doctors seemed determined to make the hearing about healthcare reform, using the hearing to voice their opposition to a public health insurance option.
The hearing was supposed to be about the practice of “post-claims underwriting.” This occurs when an insurance company cancels an individual’s coverage only after a doctor has already submitted a claim, also known as “policy rescission.” The committee conducted an investigation looking into insurance companies rescinding policies retroactively because of inconsistencies between a patient’s medical history and their application for coverage.
The first panel at the hearing consisted of three witnesses who testified about the patient side of a policy rescission situation. The second panel consisted of representatives from three of the leading companies that engage in [post-claims underwriting]” according to Committee Chair Bart Stupak (D-MI).
The representatives of the three companies — Assurant Health, UnitedHealth Group and WellPoint, Inc. — disagreed with that characterization, insisting that they only rescind policies in cases of material fraud or misrepresentation. But the patient witnesses stood as powerful evidence to the contrary.
Robin Beaton, a 59-year-old retired nurse from Texas bought a private individual health insurance plan from Blue Cross Blue Shield (BCBS) when she opened her own business after 30 years as an RN. She had recently seen a dermatologist who misleadingly classified acne she had as precancerous, but did not tell Beaton about the diagnosis.
When Beaton later developed an aggressive form of breast cancer that required costly medical intervention, BCBS used her dermatologist’s report to deny her coverage for the life-saving double mastectomy she needed. Beaton said they disregarded letters from her dermatologist explaining that the precancerous misconception did not amount to a willful omission of pertinent information on her insurance application, to no avail. Beaton was denied coverage on the Friday before the Monday on which her surgery was scheduled.
“Can you imagine having to walk around with cancer growing in your body with no insurance?” Beaton asked tearfully in her opening statement. “I can’t even say how bad it was.”
Her congressman, Rep. Joe Barton (R-TX), and his staff stepped in and worked “day and night,” as Beaton described it, to get her coverage reinstated. By the time she was again eligible for treatment, her surgery was much more expensive and invasive than it would have been originally. She is still undergoing chemotherapy every few weeks, something she said would have been less lengthy of a process had she gotten the surgery earlier.
“You just get on a waiting list, and when you’re on a waiting list, your cancer grows,” she said.
Another witness on the panel said her problems with Blue Cross showed that even those without serious medical issues can be targeted for rescission. Wittney Horton said that because her doctor had merely suggested in her medical records that she might have polycystic ovaries, a condition that is proven only by a diagnosis of exclusion, she was retroactively denied coverage for routine blood tests.
“In my case, it just shows there’s no condition too small,” Horton said. “You can’t be too young and you can’t be too healthy for them to send you to this [post-claims] department.”
Now, though she is still young and healthy, she says it is “impossible” for her to get individual health insurance from anyone.
“Every healthcare insurance company asks if you’ve had healthcare rescinded,” she told the committee, a barrier to coverage later confirmed by the health insurance representatives in the second panel.
Peggy Raddatz testified on behalf of her brother Otto, who passed away from complications from non-Hodgkins lymphoma in January. Otto’s individual coverage was stripped from him just before a costly stem-cell transplant for which he had only a three-week window to have successful surgery. Because a former doctor had written in Otto’s chart that he had kidney stones for which he was never treated and about which he was never told, he was somehow ineligible for insurance coverage.
“My brother’s hope for being a cancer survivor was dashed,” she said, adding that the hospital told her, “Unless your brother brings in cash — and a bundle of it — he’s not going to get the surgery without insurance.”
Raddatz told the committee that it was only because she is an attorney and because her state’s attorney general made two written appeals on his behalf that Otto was reinstated and got the life-extending surgery he needed.
“There couldn’t be any better memorial to my brother than what this committee is doing,” Raddatz said.
Beaton said that without the support of an elected official, she probably wouldn’t be alive today. She said she’d seen some in her cancer group whose insurance was unexpectedly rescinded lose the will to keep fighting.
“They get these letters. They just give up and they fade away and they die,” she said.
As was to be expected, though, the committee was not narrowly focused on post-claims underwriting in the individual insurance market. With the specter of healthcare reform hanging over them, two Republican congressmen couldn’t help but make a strained effort to use the rescission problem as a reason to oppose a public option for health insurance coverage.
Rep. Phil Gingrey (R-GA), a former Ob/Gyn, asked Beaton whether her experience trying to get care without insurance at county hospitals convinced her that government-run care was a bad idea.
“I don’t know how to fix it, but all I know is there’s something terribly wrong with healthcare,” Beaton replied. “You can’t even imagine how many people are there waiting for help… It’s something that’s broken.”
That seemed to please Gingrey, who said he was going to make some suggestions to the health insurance representatives present at the hearing as to how to repair the problem. “We can fix this system without, as I say, turning it over lock, stock and barrel to the federal government.”
Chairman Stupak noted at the end of Gingrey’s assertion that “some of us on the other side see it a little differently.”
Rep. Michael Burgess (R-TX), also formerly a practicing doctor, tried to get the second panel of witnesses to endorse his view of healthcare reform. He told the health insurance company representatives that he wants “you to be able to continue to do the type of business that you do” but that “there is a move afoot that would make it very difficult” to do so, referring to the public option favored by President Obama.
Burgess then asked if the three representatives would commit to providing affordable coverage to low-income and high-risk patients without government “market manipulation.” Each refused to do so unless the reforms included a provision requiring that coverage be mandatory for all citizens.
“I don’t think you’re going to get what you want,” Burgess told the health insurance CEOs. “I would urge you to think creatively… I can’t help you if you’re not willing to.”
Though the shadow of healthcare reform hung over much of the hearing, some changes discussed were not that massive, such as simplifying insurance applications. On the first panel, Horton said she felt that the forms were “deliberately confusing.”
“You’d have to be a doctor or a lawyer to fill out the application… with complete accuracy,” Horton said, noting that her medically trained family members later pointed out to her the duplication of questions on the forms appeared specifically designed to trip up applicants for later rescission.
Stupak later read a question from an Assurant health insurance application to Don Hamm, the CEO of Assurant Health. Neither man could determine what the question was asking.
The health insurance representatives refused to talk about the specific cases of the first panel, citing privacy concerns. But they insisted that the number of rescinded policies was very low, saying less than one half of one percent of patients covered have their policies rescinded.
One of the patient representatives on the first panel foresaw that objection.
“I don’t believe that it’s a very small segment of the population,” Horton said, noting that perhaps few are rescinded in the end, but asserting that many are sent to the post-claims review department to try to save every dollar they can.
Raddatz agreed, saying that anyone who does not commit fraud who has their policy rescinded is being treated unfairly.
“I don’t care if it’s just the three of us. That’s too many,” she said.
Though the insurance company representatives insisted that they need the rescission option in order to combat fraudulent applications, all three refused to commit to ending rescission in cases where fraud was not an issue, as was the case for all three witnesses on the first panel. Each was unaware of the supposed preexisting conditions cited by the insurance companies as reason to revoke their coverage.
The possibility that such rescission may not be legal was also discussed at the hearing, but left unresolved. Karen Pollitz, a research professor specializing in individual private health plans at Georgetown University Health Policy Institute, testified that the provision under the 1996 Health Insurance Portability and Accountability Act (HIPAA) that provides “guaranteed renewability” means that rescission without proof of fraud “is not consistent with your federal law.”
As the hearing came to a close, the partisan battle over healthcare reform flared up again. Burgess requested more time to address the second panel of witnesses, only to make a statement warning them that “if we don’t work together on this” then the insurance companies would be stuck with a public plan that all three representatives on the second panel opposed.
Stupak asked Burgess if he had “a question related to the hearing today” to ask the panel, admonishing his colleague for ending on “a lecture.”
Lectures aside, the day-to-day vagaries of individual healthcare coverage in the United States was on display periodically throughout the hearing. One such moment occured when Rep. Barton asked Hamm of Assurant whether mortality entered into his mind when considering the need for rescission:
“Doesn’t it bother you that people are going to die?”
“Yes, sir, it does,” Hamm replied. “We regret the necessity.”
A BUZZFLASH NEWS ANALYSIS