Kaiser's retroactive denial of a twenty-year patient
Kaiser Told to Reinstate Coverage
By Lisa Girion
Los Angeles Times
October 19, 2006
In an order posted Wednesday, the Department of Managed Health Care ruled that Kaiser Foundation Health Plan illegally canceled coverage for a Northern California woman in urgent need of medical attention for large kidney stones. The cancellation was illegal, the agency ruled, because there was no evidence the woman intended to deceive the health maintenance organization about her medical history.
The agency’s action is the latest salvo in a growing controversy over cancellations of individual health insurance policies that have saddled patients with huge medical bills. With the order against Kaiser, all three of the state’s largest health plans are now embroiled in the controversy.
Blue Cross of California, owned by Indianapolis-based WellPoint Inc., recently settled more than 70 lawsuits and claims filed by patients who accused the state’s largest health insurer of illegally canceling their coverage after they got sick. Suits have also been filed against Blue Shield of California.
The woman and her family had Kaiser coverage through her employer for 20 years. When she left her job, the family purchased from Kaiser a continuation plan commonly known as COBRA that is protected by a federal law. After that expired, the woman and her family bought individual coverage from Kaiser.
Four months after the switch, the HMO dumped her. Kaiser claimed she omitted information about her health from the application the HMO required her to fill out when it sold her the individual plan. Kaiser also threatened to report her to law enforcement for fraud and billed her for $13,000 worth of treatment.
The problem, regulators concluded, was that Kaiser faulted the woman for not disclosing an appointment she had for arm and neck pain with a Kaiser physician. “The enrollee had no reason to believe that Kaiser was not on notice of her arm and neck pain at the time she filled out her Personal Advantage application,” Amy Dobberteen, assistant deputy director of the state agency, said in the order. “Not only did a Kaiser physician treat her . but Kaiser also filled and paid for her pain medication.”
“Decisions about when insurance can be denied or revoked must be taken out of the hands of insurers who have a financial incentive to refuse to pay when we get sick and need it most,” said Jerry Flanagan, a healthcare advocate with the Foundation for Taxpayer and Consumer Rights.
By Don McCanne, MD
43 states allow medical underwriting in the individual and small group health insurance market. Although situations such as the one described in this article would seem silly if they weren’t so tragic, nevertheless, the great majority of individuals with serious medical problems who lose their group insurance because of termination of employment are denied coverage in the individual market once their COBRA benefits run out. This is a very serious structural flaw in the way we provide health care coverage.
We need structural reform that would ensure that coverage is universal and permanent. That will never occur in a market of multiple private plans, each making every conceivable effort to avoid covering individuals who have a greater probability of requiring health care. We desperately need a universal national health insurance program.