« Previous | Main | Next »

Insurer Dropped Sick Patients to Save Money

November 09, 2007 11:00 AM

Insurerdropped_mn In the middle of her expensive, months-long chemotherapy regimen, a Los Angeles hairdresser with breast cancer learned her insurer had abruptly decided to cancel her policy.

The decision ultimately left the 51-year-old hairdresser, Patsy Bates, with nearly $200,000 in debt, according to the Los Angeles Times today, but it helped win $20,000 in bonuses for the employee who made the call to cut Bates' coverage.

By dropping Bates' policy and those of roughly 1,600 others, the employee helped the insurance company, Health Net, save more than $35 million from 2000 to 2006, the paper reports.

Click Here for Full Blotter Coverage.

The company's own policies awarded cash bonuses to employees who dropped policyholders whose costly medical bills triggered the company's review of the policyholders' applications, even if they had serious illnesses -- part of what the paper calls an "industry-wide but long-hidden practice of rescinding coverage after expensive medical treatments have been authorized."

Overall, Health Net dropped roughly 1,600 policies from 2000 to 2006, the Times reports, noting that "state law forbids insurance companies from tying any compensation for claims reviewers to their claims decisions."

The company said the law did not apply in this case because Fowler was an underwriter, not a claims reviewer, and the goals she was given and which she met were reasonable. It said it cancelled Bates' policy because she had not disclosed a pre-existing heart condition in her application. Bates said any information left off the application was inadvertent.

Bates, whose treatment was partially funded by charities, still cannot afford tests to find out if her cancer has returned, the paper says. She is suing the company, who turned over documents revealing their bonus policy in court proceedings.

Do you have a tip for Brian Ross and the Investigative Team?

November 9, 2007 | Permalink | User Comments (31)

User Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Insurance Company = BLOODSUCKER

Posted by: FidoNY | Nov 9, 2007 2:28:23 PM

Well if the state attorney general allows this behavior from such a pirate then I guess we have no other accord to help defend ourselves from such a rippoff artist as this insurance co. Shall not be long I assume before american people will start taking laws into thier own hands because we cannot depend on oue state governments to protect us from such unsavory pirates in our society.

Posted by: D.Lincoln | Nov 9, 2007 2:48:48 PM

It's abuses like this that make one wonder why more people don't advocate for a nationwide, government run health insurance program. This program could be paid for with the funds companies and individuals are currently dishing out to the big insurance companies.
These heartless, money clutching insurance companies that abandon people in the middle of life saving treatment have got to go.
The problem lies in our govrnment itself and leaders who allow their votes to be influenced by the insurance lobbiests.
However, I must also fault the American consumer, who seems to have an inate fear of government run programs. They worry their taxes will go up, or that the government will dictate their health care decisions.
I guess it will take a few more people being dumped by an insurance company because they abused their health insurance by daring to get sick, to change the public's mind.

Posted by: Susan | Nov 9, 2007 3:07:41 PM

And Republicans say that healthcare does not need any governmental oversight.

Posted by: Samantha Stickers | Nov 9, 2007 4:36:46 PM

Susan, Americans have a right to fear government run health programs. In Great Britain, the wait to see a specialist even for life threatening conditions is months - and that's just for a consultation. What this company did is wrong and unethical, but the government needs to prosecute the bad guys, not attempt to manage dispensing health care! I for one don't want to exchange choice and access to good care for free but limited or inaccessible services. Free health care isn't free! And the government can't effectively manage programs it already controls - do you want some civil servant bureaucrat dictating life and death decisions? I think that's a different kind of evil, but just as bad as the unethical underwriter.

Posted by: VA | Nov 9, 2007 4:41:45 PM

No this is not right but to say this is a good reason to make the goverment do health insurance. Why dont we close the loop hole in the states that this happens. The reason the price of medical coverage is so high is the same reason america loses jobs and billions of dollars a year to another country. Illegal immagriants. If you take them out of the the country you would not have the hospitals closing. the hospitals would not have to write off billions of dollars a year that they cant get back since the illegals move around every couple months. Oh and the argument of they do jobs american won't. They would if you wouldnt pay them to sit at home on they behinds. If they cant afford to live on those jobs maybe we should to put a minimum annual salary by the federal goverment and if you dont make over a certian amount the federal goverment will give you the rest. oh ya why would we do that it would give them no reason to vote for the democrats and the war on poverty which will never be over.

Posted by: Damien | Nov 9, 2007 4:50:28 PM

This is an OUTRAGE. Dropping the policies of sick people ! Lord have mercy !

Posted by: John | Nov 9, 2007 7:03:06 PM

I feel bad for anyone that has to face cancer. However, I would like to know more about this pre-existing heart condition. If she knowingly did not disclose a condition, then who is the "rip off" artist? What company wouldn't check to see if they were they victims of fraud. I can tell you that the government does not have the best track record in this department. Is it possible to imagine fake clinics treating dead patients and collecting huge somes of money from the government for it? I can see it happening - always a "rip off artist" somewhere. A government controlled health care would be a disaster. What have they done to prove to you that they efficiently manage money. Is it our bankrupt Social Security or our trillion dollar war? I do not work for an insurance company, I believe in our court system to punish wrong doers - on either side of the fence.

Posted by: Scott | Nov 9, 2007 7:06:22 PM

We don't elect for national care because we wouldn't get any care you idiot! Why are democrats so stupid? Have you ever been on Medicaid? It's the crappiest medical care in the world!

Posted by: Tina | Nov 9, 2007 10:56:27 PM

Well you can besure of one thing...If Congress try's to fix the problem BUSH and the REPUBLICAN THUGS will VETO any action Congress takes..Take this to the bank..

Posted by: Joe Murphy | Nov 10, 2007 2:10:25 PM

Even in England where the government has national healthcare, many people pay for private health care. People come from other countries to England in order to take advantage of the free health care. Demand is going up which puts a strain on the government funds available to pay for the services. I'd think it foolish to believe that a national healthcare system would solve all the problems. It might solve some, but it would create others. Use your brain.

Posted by: Sean | Nov 10, 2007 2:24:39 PM

For those who use the 'pre-existing condition' to justify the acts of this insurance company, here's a heads-up. If you have a policy for a time and a condition is discovered for the FIRST time which had taken LONGER than the policy was in effect to develop, the Insurance companies often claim it was a pre-existing condition and deny benefits. Insurance companies are in the business of making PROFITS. So are most hospitals and doctors and other health-care providers. Until the profit motive is removed, we'll see cases like this more and more often as costs continue to climb.

Posted by: fatesrider | Nov 10, 2007 6:16:42 PM

what does the heart condition have to do with the cancer, seems like a really bad excuse to me for them to cancel the insurance. If there was a history of cancer or a prior condition related to cancer then they might have a reasonable cause for termination of the policy but it does not sound to me like there is any link to the treatment being offered. Or if she was being treated for a heart condition maybe

Posted by: Aaron | Nov 10, 2007 8:29:43 PM

This is a prime example of the consequences of selfish thinking. When one starts to think of how to get themselves ahead, such events are bound to happen.

Posted by: Samantha | Nov 10, 2007 10:13:56 PM

If you think cutting off medical care to save the company money, just wait until these companies have access to your DNA sequences. There must be federal protection from this type of business ethics and companies will certainly fight it with all the resources they have. It borders on criminal to deny coverage while a patient is undergoing chemotherapy, surgeries and the like. There should be a very wide risk pool and not the ability to hand pick policyholders. Your DNA will predict things like high blood pressure risk, diabetes, cancer, genetic diseases and a whole litany of diseases and disorders. Best thing to do is to be well-informed and in contact with representatives and senators on this extremely important issue. Your life could very well depend on it.

Posted by: curtis41 | Nov 11, 2007 6:00:35 PM

Four years ago I had surgery on my upper spine, neck area, for ruptured disks. Around three months later I received a letter from my insurance company informing me they wanted me to reimburse them for the actual surgery, but did not mention the medical care before or after. I wrote back to say basically hell no. That was the last I heard from them on the subject. They did start to pay my medical bills very slowly from then on. As soon as I was eligible for Medicare I dropped this over priced coverage. I don't know why I should pay nearly $600 a month for insurance and then they request repayment for anything. It struck me as rather ridiculous. Maybe some feel they are obligated and pay them. Of course they made no mention of saying no, in any form, in their request letter.

Posted by: Connie | Nov 12, 2007 3:12:08 AM

Like I say over and over again, do away with the health care system. Minimize the prize of every thing. You know whats going to happen now... people will go to other parts of the world or other countries (for medication) to get medical help. It will cost then a fraction of what they pay here. Don't complain then that health care system is loosing money!

Posted by: kilroy was here | Nov 12, 2007 9:38:07 AM

This insurer should be prosecuted; insurance companies want exorbitant fees for their services yet try anyway they can to not pay out. God have mercy on the soul of the employee who dropped this woman for a few bucks. It is disgusting how people treat each other!

Posted by: Marsha | Nov 12, 2007 10:02:33 AM

She acknowledged that she left out her pre-existing heart condition claiming it was an oversight. An oversight? She deliberately attempted to deceive. The tricker got tricked. How about her accountability? Kilroy said its disgusting how people treat each other. I say its disgusting how we defraud and then expect others to do right by us.

Posted by: desertrat | Nov 12, 2007 12:02:50 PM

"Grand theft" by HMOs is not reported by the U.S. media; that's where media's big profits come. Just take note of health insurance and drug company ads on radio and TV, in newspapers and magazines, including AARPs publications. The greatest transfer of wealth from the middle class to the wealthiest 2%--not only in the history of the U.S., but of the world--began when Reagan/Bush slashed the 15 tax brackets to the present number. The "grand for a few take" has exploded since. In 1996,the former CEO of OxfordHealthPlans,Stephen Wiggins,took as "compensation" $111,900,000.00,OneHundredElevenMillion
NineHundredThousandDollars.Then Wiggins resigned. In that same year,Oxford's David Snow took $34.3 million;William Sullivan took $28.3 million; Robert Smoler took $24.1 million.

Posted by: Ena | Nov 12, 2007 12:29:57 PM

Post a comment