'Obamacare' Neglects Insurance Company Abuses

By MARGIE BURNS

The healthcare marketplaces that are an integral part of the Affordable Care Act (ACA) kicked off Oct. 1 with the debut of HealthCare.gov and other statewide exchanges. Some bad news strategically promulgated by insurance companies came the same day. In a letter to the editors of the Nevada County, Calif., Union, a customer complained that “On Oct. 1, we got a letter from Anthem Blue Cross saying our coverage was no longer good enough under the Affordable Care Act, that our policy was changing in December and would now cost almost $1,100 a month.” Fulfilling a company’s dreams, the letter writer blamed “Obamacare” rather than Anthem, one of the state’s largest insurance providers, and a rightwing newspaper ran the letter. On Oct. 22, KCBS TV in Los Angeles reported that customers of insurance giant Anthem Blue Cross were getting letters stating that the company could no longer continue the customer’s Anthem policy, because of the requirements of the Affordable Care Act.

As we know, the bad news in California did not end there. The worst problems under the ACA have occurred in individual insurance — people buying insurance as individuals because they do not have an employer-sponsored plan or Medicare, Medicaid or other federal or military coverage. California, with the country’s largest state population, also has one of the largest insurance markets. Thus problems in individual coverage in California also have been outsized. On Nov. 5, California Insurance Commissioner Dave Jones held a news conference to announce a deal with another California major, San Francisco-based Blue Shield. Blue Shield had rolled out notices of cancellation of 80,000 policies, covering 113,000 people, without giving customers the 180 days of notice required by law. The agreement between the state insurance commission and the company postponed the cancellations, with an extension to March 31, 2014. The protection is less than fireproof: Blue Shield warns that customers may still be liable for two sets of deductibles and may miss out on tax credits and subsidies. Blue Shield is purchased through the Covered California (state) exchange, which has been issuing fall press releases under headings such as “Covered California board says no to President Obama, won’t extend canceled policies.”

Nothing like keeping the public scared. Fortunately, pushback is not dead. Two long-term policyholders filed separate lawsuits against Blue Cross of California on Nov. 4, each alleging that Blue Cross induced them to switch from grandfathered policies in order to cancel their health insurance. One customer, a 63-year-old woman who had been a policyholder for 25 years, alleges that Anthem Blue Cross pressured her to switch policies in 2011. Under the ACA, policyholders who bought insurance before March 23, 2010, can keep their policies, which must still comply with key provisions of the new law. When a customer relinquishes the grandfathered policy, he or she can be forced into a more expensive policy. The law firm for the plaintiffs is Shernoff Bidart Echeverria Bentley LLP. The two lawsuits claim that “Blue Cross concealed information about the consequences of switching plans and intentionally misled its policyholders to encourage the replacement of grandfathered policies. ... Blue Cross successfully enticed tens of thousands of its individual policyholders to switch out of their grandfathered health plans and forever lose their protected grandfathered status.”

The International Business Times estimates that in California alone, there have been 900,000 cancellations of individual coverage, to take effect Dec. 31. The companies involved allegedly did not inform customers with grandfathered policies that their policies would be required to include the same provisions required of other policies under the ACA. It would be interesting to learn whether even this lapse was consistent across the board for all customers with grandfathered policies, or whether the company did inform some upscale customers.

On the bright side, improvements continue. On Nov. 12, Anthem Blue Cross of California granted an extension to some customers. Like Blue Shield, Anthem had failed to issue timely notices to an estimated 104,000 customers before moving to cancel their policies. Anthem spokesman Darrel Ng stated to media that “The affected members were inadvertently omitted from the original mailing.” Policyholders who want the temporary extension must notify the company. The deadline is Dec. 15.

Anthem Blue Cross is itself a unit of giant insurance conglomerate WellPoint Inc., a descendant of one of the “SomethingPoint” companies created in the early 1990s. As reported elsewhere, William H.T. Bush, an uncle of George W. Bush, has served on the WellPoint board of directors since 2002. On May 18, 2010, news media reported that the elder Bush collapsed at a WellPoint meeting and was rushed to a hospital, where he was reported in good condition.

According to the most recent proxy filing with the SEC by WellPoint Health Networks, Inc.,

“William H. T. Bush, age 64, was elected a Class II director of the Company in January 2002, upon completion of the Company’s merger with RightCHOICE Managed Care, Inc ... Mr. Bush served as a director of RightCHOICE from April 1994 to January 2002. He served on the Blue Cross and Blue Shield of Missouri board of directors from 1989 to 1994 and as Secretary of the Blue Cross and Blue Shield of Missouri board of directors from 1990 to 1994 ... Mr. Bush serves on the Audit Committee and the Nominating & Governance Committee of the Board.”

The way some large media outlets have covered the Affordable Care Act is itself a problem. I have seen newspaper hysteria before — this writer is from Texas, where men are men and newspapers are awful, as the old saying goes. But I have never seen such obliviousness to a blatant corporate effort to destroy established law as well as public policy — except with regard to the insurance industry. For decades, most major newspapers turned a blind eye to the most egregious offenses, even to insurers’ cancelling a policy when the policyholder became ill. Thus an abuse that should have made headlines was left to John Grisham in The Rainmaker and Michael Moore in SiCKO.

Obtaining individual insurance has always been difficult or expensive. This expense is the reason why so many otherwise middle-class individuals have not purchased full health insurance, yet it has been lost sight of in media hype, and corporate glee, over problems in the health care rollout. For the past 50 years, health insurance premiums have risen every year. Yet this point is reported virtually nowhere. It should also be noted that one insurance company tactic against passage of the ACA in 2010 was to threaten to raise rates. This reminder also appears virtually nowhere in prominent coverage — not even in the Washington Post that gave coverage to the threats themselves.

Meanwhile, a class action lawsuit has been green-lighted in California against another company ploy. Blue Cross of California is the defendant in a class action case involving alleged “bait and switch” tactics. With implementation of the new health care law looming, the company attempted to issue policies with fine print that allows Blue Cross to change “any term or benefit” of customer’s policies each month. The lawsuit is being brought by non-profit Consumer Watchdog. According to attorney Jerry Flanagan, “In the world according to Blue Cross, consumers are required to buy its policies, but once enrolled, Blue Cross can change the price and take away the benefits and coverage it promised.”

Margie Burns writes from Washington, D.C. Email margie.burns@verizon.net. See her blog at www.margieburns.com.

From The Progressive Populist, January 1-15, 2014