Now it looks like the push-back against rescission may be spreading. Henry Waxman, a Democratic California Congressman, held a hearing on the subject yesterday and said his oversight committee plans to investigate the issue nationally.
“I understand that California insurance companies need to protect themselves from fraud,” Waxman said in his opening statement. But “insurers are using technicalities or trumped-up ‘misrepresentations’ to rescind policies after individuals get sick and accumulate hundreds of thousands of dollars in medical bills.”
The health insurance industry supports the third-party review, established by the states, for rescission decisions, Stephanie Kanwit, special counsel to the trade group America’s Health Insurance Plans, said at yesterday’s hearing.
Kanwar said the practice is very rare. And, she said, collecting accurate information on applicants’ health history is essential for the insurance market to function. “When individuals wait until they are ill before purchasing health insurance, costs are increased for other policyholders who pay into the system on a regular basis,” she said.
And earlier this week, Los Angeles’ city attorney announced a lawsuit against Blue Shield over the rescission issue. The city attorney launched an investigation into the issue earlier this year and has already filed lawsuits against a few other insurers.
To quote hospital administrator Jim Raggio, “Last year, California hospitals provided $9.7 billion in uncompensated care, including $3.5 billion in Medicare shortfalls, and $2.7 billion in losses from the MediCal program.”
Thus, nearly 64 percent of uncompensated care comes from those insured by the government, not the uninsured. Physicians also fare badly under said government and private insurance programs.
There is not one nationwide or statewide price for services. Supposedly higher cost-of-living counties get higher rates, but this isn’t true for Santa Barbara and San Luis Obispo counties, which are grouped in the cheapest rates paid in California.
As for a health-care crisis, expect it to be severe in Lompoc. Several primary-care physicians have left or are contracted to leave Lompoc shortly.
It is time for the citizens of the Lompoc Valley to realize they face a local healthcare crisis, one that government health care in California does much to cause. Our local hospital suffers from HMOs routinely referring specialist examinations and elective in- and out-patient hospital services to Santa Barbara, about 65 miles away, while, by law, HMOs must offer care within 30 miles. HMO patients can insist on their right to be cared for locally when appropriate health care service is available.
It’s not acceptable for us to ignore such massive waste in the insurance industry when Californians are being bankrupted by rising health insurance premiums and gutted benefits,” stated Senator Kuehl. “California consumers have a right to know that there is a basic formula in the law for how much of their money is actually being spent on medical care. This is the least we should be doing.”
