Ira Glass looks at the fine print in health insurance
Ira Glass reports on what he found at a recent House subcommittee hearing on the health insurance industry.
The following is not a full transcript; for full story, listen to audio.
"This American Life's" Ira Glass attended a recent House subcommittee hearing on a practice in the health insurance industry -- buried in that industry’s own fine print -- called rescission. The following report is what he learned from the hearing.
The hearing was a culmination of a year-long investigation by the subcommittee into the fine print of the nation's insurance policies. Specifically, the subcommittee looked at something called rescission, which applies to those people who have individual insurance policies.
Rescission happens when an insurance company cancels a client's policy because they believe the client lied when they applied for the policy -- the client pretended that they were healthier than they really were, the client concealed a serious and expensive illness, or the client simply made a mistake and omitted something about his or her health that the insurance company wanted to know.
The problem, according to the House subcommittee's investigation, is the amount of people who were rescinded who weren't trying to deceive the insurance companies at all. They found that when a client became ill -- especially with an expensive illness -- the insurance companies looked for a way to cancel their policy.
The subcommittee found a man in Virginia who lost his coverage because the insurance agent who sold him the policy incorrectly wrote down his weight on the form. There was also a patient in Utah who needed surgery, but lost their insurance because of an omission on their spouse's application.
Congresswoman Jan Schakowsky, a Democrat from Illinois and a member of the subcommittee, said that even somebody like her -- who's worked on health care issues for decades -- was surprised to find out that this could happen.
"I hadn't even heard of it before," said Schakowsky. "That you could be paying premiums, and then exactly when you really need the health insurance, they go back and deny it."
Schakowsky and her peers on the subcommittee were outraged, in a "very emotional and personal way" she said. "The very idea that a woman who has been diagnosed with aggressive breast cancer, who was insured and suddenly told, 'we're not going to pay for this'."
Schakowsky was referring to Robin Batin, a 59-year-old woman who was a registered nurse for 30 years. In June 2008, she was diagnosed with an aggressive form of breast cancer and needed a double mastectomy immediately. In the subcommittee hearing, she testified that her insurance company refused to pay for her surgery.
"The Friday before I was to have my double mastectomy, Blue Cross and Blue Shield called me by telephone and told me my chart was red-flagged," said Batin.
Schakowsky explained what the insurance company found, "There was something on her chart earlier about a dermatitis that they took to mean pre-cancerous, and even though the dermatologist called and said 'please, this is acne, do not deny her the breast cancer treatment,' they said no.
"It took months for her to finally get the surgery that she needed, by which time the tumor had doubled," said Schakowsky.
At the hearing, representatives of the insurance companies who testified were asked by a subcommittee member, "Doesn't it bother you that people are going to die because you insist on reviewing a policy that somebody took out in good faith and forgot to tell you that they were being treated for acne -- doesn't that bother you?"
"Yes sir it does," said one of the heads of three insurance companies in attendance at the hearing. "And we regret the necessity that that has to occur even a single time."
The three company heads were Don Hamm of Assurant Health, Richard Collins of UnitedHealth and Brian Sassi of WellPoint.
At one point in the hearing, Congressman Bart Stupak (D - MI) pulled out a list of 1400 medical conditions that would have triggered WellPoint to investigate a client.
"Diseases ranging from heart disease and high blood pressure, diabetes, and even pregnancy -- so what do these conditions have in common that would cause you to investigate patients with these conditions for possible rescission?"
"I would say there's no common theme other than these are conditions that, had the applicant disclosed their knowledge of the condition at the time of the initial underwriting, we may have taken a different underwriting action," said one of the insurance company heads.
"So in 1400 different areas they lie? The applicants lie? Or is it a cost issue? These are 1400 expensive areas, aren't they," asked Congressman Stupak.
"Rescission is not about cost," answered an insurance company head.
According to the subcommittee's investigation, between the years 2003 and 2007, these three companies saved at least $300 million dollars through the use of rescission.
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This report is excerpted from a recent episode of "This American Life" called 'Fine Print.' The economy blog, Baseline Scenario said of the report, "The 'This American Life' crew ... once again proving that they can cover any topic they want better than anyone else in the media."
The "This American Life" public radio show is a weekly broadcast heard on 575 public radio stations, with an estimated weekly audience of over 1.8 million. It is distributed by Public Radio International and produced by Chicago Public Radio. More "This American Life."
The failure of the US health care system only came home to me fully this summer when we came to help look after my mother in law.
Suffering from advanced Parkinson's and responding poorly to all the Parkinson's medication, she's in a tough spot. She lives with my Father in law who's a retired teacher from a state College. He's paid insurance his whole working life.
Now at the end of their lives, they face a bewildering array of agencies and relevant sources of care, from their insurance company, Medicare, Medicaid, Hospice care, their own funds to private nurses. There's consultants operating independently and consultants associated with each agency. It's baffling, endlessly complex, and each of course says that someone other body should be dealing with covering the costs of her needed care.
Nothing will cover the 24 hour, 7 days a week care she actually needs.
They have adult children who are far away but able to help, I can't imagine what it would be like if they were on their own or worse, on their own with no partner.
Relatedly, about 12 years ago when we bought a long-term term life insurance policy, because the doctor had indicated that he had written a prescription for an anti-depressant, we were informed that we didn't qualify for the preferred premium that we otherwise qualified for.
Instead of sending him to a doctor for a doctor's opinion first, they sent him a 33 page document on to fill out. Basically they wanted to know everything he did daily in 15 minute increments. Some very personal questions that should have been asked by a doctor.
After reading up on disability, it is an accepted practice that the social security agency turns down the first disability claim. It is said over and over again that if you want to get the claim to go through, you will need to hire an attorney. I know people who had leukemia and Lou's Gehrig's disase to died long before the fist social security check came in.
There are military people coming back to this country injured who need medical assistance and the government is lagging behind with their injury care.
Do any of you really think that the government would do any better with the general public when they cannot even care for our injured solders?
Pain doctors now drug test their patients. No painkiller in the system, no pain prescription. Clients have been doctor-shopping and selling the pills on the black market.
Advertising, commerce and public entertainment encourage and enshrine this sort of behavior. The good old American outlaw.
I commend any and every public servant trying to meet a public need.
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