Thursday, April 22, 2010

No Breast Cancer Coverage

You may have seen this already:

One after another, shortly after a diagnosis of breast cancer, each of the women learned that her health insurance had been canceled. First there was Yenny Hsu, who lived and worked in Los Angeles. Later, Robin Beaton, a registered nurse from Texas. And then, most recently, there was Patricia Relling, a successful art gallery owner and interior designer from Louisville, Kentucky.

None of the women knew about the others. But besides their similar narratives, they had something else in common: Their health insurance carriers were subsidiaries of WellPoint, which has 33.7 million policyholders -- more than any other health insurance company in the United States.

The women all paid their premiums on time. Before they fell ill, none had any problems with their insurance. Initially, they believed their policies had been canceled by mistake.

They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.

Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women's specific cases without a signed waiver from them, citing privacy laws.

The whole article is worth reading. It also discusses whether this practice can be ended in the health care reform bill. But the gist of the piece is in the above quote. Note, in particular, the bit I have bolded.

This computer algorithm was used only to weed expensive customers out. It was NOT used to detect fraud in the application forms of those who were not claiming much. Indeed, low claimers could be as fraudulent as they wished because they were bringing money in! That is a biased practice. The company should screen for fraud among all its customers if it wishes to screen for fraud.

Once people learn of practices like this one they may choose not to be covered by this insurer. After all, you may not be covered when you really need to be! As one of the women discussed in the article points out:

Relling adds: "I laud people who give money to charity -- but not at the expense of cancer patients and people who have paid health insurance premiums for 20 years and never missed a payment -- and then get canceled when they most need their coverage. What about the thousands of people who have their policies canceled by their company for no good reason? When are they going to make that right?"

Thanks to res ipsa for the link.