Profiting From Insecurity

I’ve seen the commercials on daytime TV, promising health insurance for just pennies a day. No physical exam needed. They seemed to be targeting the elderly, and I figured it was probably a scam to get people to pay for what is already covered on Medicare.

It’s not just the elderly who can be tempted, though. When people get worried, or desperate, they can make ‘bad choices’. And the present situation doesn’t offer many good ones…

Minnesota Attorney General Lori Swanson filed suit Wednesday against two out-of-state health insurance companies.

The suit alleges that the two companies, Missouri-based Consumer Health Benefits Association and Nevada-based Home Health America, duped consumers into believing they were buying affordable health coverage, when in fact they were purchasing non-insurance products with few benefits.

“Many people are struggling with skyrocketing health insurance premiums,” Swanson said in a statement. “Some companies are exploiting the lack of affordable health coverage by aggressively promoting risky, unregulated health coverage products that offer little or no financial protection if you get sick.”

This is one situation where the free market is a little too free and a state has to step in to protect its citizens. When people have a real choice of well-regulated insurance providers and a pubic option these exploitative schemes will find no buyers.

Parasitical Worms Afflict American Health Care

Good article by Richard Salit in today’s Providence Journal about scammers marketing fake health insurance…

“Medical discount cards are spreading like kudzu because so many people are being laid off and going without health insurance or simply can’t afford premiums anymore. They are looking for affordable ways to cut their medical costs and discount cards are springing up in response to an urgent market need,” says James Quiggle, spokesman for the Coalition Against Insurance Fraud, a group that includes consumer advocates and insurance companies. “Unfortunately, much of that response is fraudulent and abusive.

It’s easy enough for even amateurs to put up a website, print cards, run a TV commercial and take hundreds of dollars monthly out of a bank account via direct withdrawal. Just like the big guys. But they don’t spend much on phone support…

After being put on hold, the line went dead. When the reporter called back, a man answered the phone, “Bob’s Abortion Clinic.” The screen on the reporter’s phone showed it was the same number. The reporter asked to speak to a supervisor. A man who called himself “Stuey” eventually got on the phone. He insisted it was an abortion clinic in St. Louis and then the line went dead again. [the rest of this sordid tale here]

The big guys are more accountable. They answer their phone, and most of the time they give coverage for the money. But don’t get yourself too sick, or you might find out that they operate on the same basic principle as “Stuey”–charge the most money for the least service. It’s not that they’re evil, it’s the profit principle–a shark has to keep moving.

A single payer system would clean out the parasites. A government sponsored affordable insurance plan would give people a safe alternative to the shady, complicated, ‘buyer beware’ system we have now. This system sucks money from the people who can least afford it, and really dishes out the pain when they get sick.

Update– via Daily Kos this link to a NYT editorial about a process called ‘recission’ that allows big insurers to cancel benefits when a subscriber gets sick and needs to make claims.