#MoreLikeThis

by publius

Rescission -- i.e., canceling coverage when you get sick -- is arguably the most outrageous action that health insurance companies take.  So kudos to the Post for putting a rescission story on A1.  There's more to this debate than town halls.  This is what's really at stake in our once-in-a-generation opportunity for reform:

In a pending case, Blue Shield searched in vain for an inconsistency in the health records of the wife of a dairy farmer after she filed a claim for emergency gallbladder surgery, according to attorneys for the family. Turning to her husband's questionnaire, the company discovered he had not mentioned his high cholesterol and dropped them both. Blue Shield officials said they would not comment on a pending case.

Officials from three insurance companies told a House Energy and Commerce subcommittee this summer they had saved $300 million by canceling about 20,000 policies over five years.

It doesn't get much better before or after this excerpt.

Comments

[Jacob Davies]

I don't understand how they can get away with canceling someone's policy absent evidence of intentional fraud, especially when the problem is unrelated to the expensive medical problems that person is having.

I thought we have courts and regulators for this kind of thing? Sincerely, I do not understand how they can do this and not get sued into the ground.

The problem is as old as insurance. You have insurers who sell policies to people who think they are insured. When they try to claim, the insurer goes back and finds some reason not to pay. You have regulators to stop this. True, the inverse also applies, you have people who deliberately conceal illnesses from the insurance company so they can get coverage, but there seem to be plenty of cases that aren't obviously fraudulent.

(And what a lovely system it is that pushes the very sick towards fraud just in order to receive care. Ah, America, a Christian nation - except for Matthew 25:45...)

But it's this that starts you down the required-public-option chain. Community rating fixes the rescission problem at least insofar as pre-existing conditions are concerned. But then you need a mandate to prevent the system from getting top-heavy with unhealthy people. But then you need a public option because forcing people to pay taxes to private parties is dangerous.

[liberal japonicus]

I thought we have courts and regulators for this kind of thing? Sincerely, I do not understand how they can do this and not get sued into the ground.

Given the teams of lawyers they employ, they can simply abstain from giving treatment and stretch out the proceedings until the person croaks. If the surviving spouse sues, they can do the same thing until the exhausted spouse takes an out of court settlement where they can't say anything. Or they can relent and give treatment, but too late, which makes it much more difficult to prove that the withholding of the treatment was causal.

This analysis suggests

If, as I suspect, rescission is targeted toward the truly bankrupting cases – the top 1%, the folks with over $35,000 of annual claims who could never be profitable for the carrier – then the probability of having your policy torn up given a massively expensive condition is pushing 50%. One in two. You have three times better odds playing Russian Roulette.

But note that forcing insurance companies to tighten this up reduces their profits, which gives them more reason to fight again any other changes.

[Jesurgislac]

The problem is as old as insurance. You have insurers who sell policies to people who think they are insured. When they try to claim, the insurer goes back and finds some reason not to pay. You have regulators to stop this. True, the inverse also applies, you have people who deliberately conceal illnesses from the insurance company so they can get coverage, but there seem to be plenty of cases that aren't obviously fraudulent.

And then you have the NHS, or for that matter any system where the government guarantees coverage - the "public option", and nobody needs to deliberately conceal pass illnesses from their doctor or from anyone else, because it's not a profit-making operation and no question of denying coverage.

Much more practical; much cheaper; much more beneficial to the patient.

There are many reasons why every other developed country's healthcare system outperforms the US's, and ending the practice of rescission is just one of them. But it's a doozie...

[Jacob Davies]

Spent the first 22 years of my life in Britain. It took me a long while to understand the American medical system.

You get out of college. You get a nice white collar job. You feel like you have "health insurance" because you go to see your doctor a couple of times a year. You're young and healthy.

Then you start working as a freelancer, and you buy "health insurance" because you know, that's a good idea. You still see your doctor a couple of times a year. Routine care is easy.

Then you get cancer. Then your insurance company cancels your policy. Then you sell everything you and your family owns to pay the bills. Then you run out of money, because you don't have a job, because you have cancer, remember?

Then you die. And the rest of your family is financially ruined. But! Some guy at Blue Cross got to retire early, so it all balances out, as long as you're that guy.

It's the American Dream.

[russell]

Someone has to tell me why the insurance companies deserve one new york minute of consideration in the whole health care debate.

Why? What value are they adding for the billions they take away from actually providing health care to people?

They saved $300 million by cancelling 20,000 policies over five years. What the hell does the word "save" mean in that sentence? Where did that $300 million go?

When I read stuff like this, I want to beat the living crap out of somebody. These guys are heartless, greedy motherf'ing SOBs hiding behind the doctrine of fiduciary responsibility.

If they can't make a buck without killing people, then it's time for them to get into another line of business. If the industry as a whole can't survive without killing people, then it's time to take the industry out of the private sector.

The point of health insurance is not to make buckets of money. The point of health insurance is to spread risk so that the folks with really expensive problems don't freaking die or go bankrupt.

If the health insurance industry isn't making that happen, then its reason for existing is gone. Take it into the public sector and be done with it. If there's one thing the government is good at, it's running bureaucratic, bean-counting things like providing health insurance.

Seriously, f*** these people. If they don't want to be painted as the bad guys, they need to quit being the bad guys.

Somebody should stack up $300 million in one dollar bills and make the C level executives and the board of directors of BCBS eat them one by one. On TV. In prime time.

The whole health care debate is driving me over the freaking edge.

Why can't we just make up our minds to take care of each other? How god damned freaking hard of a concept is that to get your mind around?

Jesus Christ.

[watchinginwonder]

The real question the commerce subcommittee should have asked but probably did not is how much of that 300MM savings to the private sector was transferred to the public (i.e. taxpayers) sector when these people showed up at emergency rooms for care. My guess is all plus a hefty multiplier.

[Woody]

"For-Profit" health care is a crime against humanity.

There is no other way to evaluate it.

Those who profit from the illness, and injury, or who increase their profits by denying services to the ill and injured are the most heinous, bloody-handed, vicious kinds of criminals.

[John Thullen]

How much do Charles Grassley, John Boehner, Erick Erickson, Rush Limbaugh, any old Blue Dog, Newt Gingrich, Michael Steele, Sean Hannity, and the rest of the killers get paid to serve on these cushy private-sector death panels?

Is it a rotating appointment, or does this gigantic group of murderous scumbags require a huge venue to pass their cruel judgements, an arena perhaps?

These are the questions President Obama should be sending out schoolchildren to learn the answers to. The lesson plan should include instructions on what to do if you corner one of these despots.

Is "stupid" just another pollutant in the water, or what?

[Sapient]

Now we're talkin', John Thullen. We really need to outshout these people who want to preside over our ruin, and the country's.

[Marty]

"Is "stupid" just another pollutant in the water, or what?"

No it's a sign I hand out to people where appropriate

[cleek]

as usual it takes three months for the press to figure out what the story is really about. by then the GOP lies have spread, penetrated, metastasized, so infected the conversation that even plain truth sounds strange.

nice racket.

[Eric Martin]

I for one am worried about government rationing and death panels.

[CaseyL]

What russell said.

Also, I do dimly recall a time that insurance companies didn't cancel policies whenever it suited them. Is my memory faulty, or was that actually ever true; and, if so, when and why did it change?

[ChrisJ]

Toward the end of the story is a particularly odoriferous anecdote. A woman lost her policy because she failed to disclose she had uterine fibroids, even though she didn't know she allegedly had them. At surgery it turned out she actually didn't. As she said, "They said I had a condition I didn't even have, . . . . And they canceled me."

[Older]

The $300 million went into the pockets of top insurance execs AND the pockets of almost all of our elected congresspersons, of both houses.

[mckinneytexas]

"I don't understand how they can get away with canceling someone's policy absent evidence of intentional fraud, especially when the problem is unrelated to the expensive medical problems that person is having."

Recission is the easiest problem to deal with and does not require a public option or anything else other than a federal statute to the effect that (1) pre-existing conditions are not subject to exclusion from any policy of health insurance and (2) retrospectively, no policy of insurance may be rescinded unless a pre-existing condition was actively concealed or misrepresented by a prospective insured and that the prospective insured intended to deceive the insurer into issuing the policy and, most importantly, that the fraudulent concealment or misrepresentation was material to the actual risk for which insurance benefits are sought, i.e. high cholesterol is irrelevant to emergency gall bladder surgery.

As it happens, this is the law in pro-business Texas. I suspect it is the law in most states. Blue Cross is known for its Chickens&*t. Under Texas law, on the facts Publius reports, I would recover actual damages, treble damages and attorney's fees unless the policy was under ERISA, which is a federal program for screwing employees. Exempt health insurers from ERISA damage caps, inject a treble damage penalty and make the recovery of attorney's fees mandatory, and private insurers will get a lot more responsive a lot faster.

[Nate]

I'm confused. First, we're told that medical lawsuits are the main reason insurance costs so much, now mckinneytexas is claiming that if MORE lawsuits were aimed at health insurance companies, things would be cheaper and there'd be no recission?

(nevermind the fact that somebody who's _dying of cancer_ and has their health insurance denied is not in the best position, either with money or time or attention to go and sue a giant corporation)

[JanieM]

(1) pre-existing conditions are not subject to exclusion from any policy of health insurance

mckinneytexas, maybe I'm missing something but I don't think it's that simple.

If your item (1) is implemented without some kind of universal coverage system (mandated or whatever), what's to stop people from just not buying insurance until after some condition already exists? Much as I agree with Russell about insurance companies, that's not a workable model for any system of insurance.

Also, do the laws you're talking about apply to policies bought by individuals, or just group policies? I'm self-employed and I buy an individual policy. Where I live, if you buy a new policy, pre-existing conditions can be excluded for a period of time, but you get credit on that time period if you've been covered all along. (It's not even this simple, really, and I'm not sure I'm up to date on how it works. I haven't changed policies in a very long time.)

Jacob summarizes the interlocking problems in his comment at the top of the thread:

Community rating fixes the rescission problem at least insofar as pre-existing conditions are concerned. But then you need a mandate to prevent the system from getting top-heavy with unhealthy people. But then you need a public option because forcing people to pay taxes to private parties is dangerous.

[John Thullen]

That woman should have taken control of her own individual healthcare situation and diagnosed her own damned fibroids.

Doesn't she read the Wall Street Journal editorial page?

[jdkbrown]

"Under Texas law, on the facts Publius reports, I would recover actual damages, treble damages and attorney's fees unless the policy was under ERISA, which is a federal program for screwing employees."

Or unless you, you know, died.

Look, for profit health insurance companies are going to do everything thing they possibly can to avoid paying out, walking right up to the legal line and putting a toe over it if they can get away with it.

[doctorpsycho1960.blogspot.com]

Russell, your final question is answered by your final exclamation.

If you go around saying that people should try being nice to one another for a change, you run the risk of being thought something supernatural and/or someone who ought to be killed.

[efgoldman]

Its a SCOTUS thing. Sorry I can't cite the case, but Gary Farber looked it up for us several threads ago.
The nut of the decision: If an insurer is sued for cancelling or failing to provide coverage, and loses the case, it is liable only for the benefits that would have been paid out if the insurer had covered the treatment/operation/care/whatever.
No punitive awards, no pain and suffering awards, no loss of companionship awards. None of the big, scary ways that plaintiff's lawyers use to push corporate defendants.
Without the possibility of big punitive damages, where's the incentive for the insurer to cover anything? Where's the incentive for the defense attorneys to rush to settlement?
At the time, Ted Kennedy threatened to push legislation to overturn the decsion, but then we were faced with the Dark Age of GOP control of one or the other house of Congress and/or the White House.

[Jenna Moran]

It seems worth making the observation that insurance companies are not in the business of providing "insurance." They're in the business of selling _a credible belief that one is covered_ and in the business of _denying coverage._

Aspiring to provide "insurance" or to "spread out risk" or to "help society provide health care," even taking home a sizable income while doing so, incurs a substantial opportunity cost as opposed to being a deceitful vulture, and would thus be breaking with the officers' fiduciary duty to their shareholders.

Any thinking on the subject that's predicated on the notion that the companies exist to provide health insurance in any meaningful fashion will necessarily go awry. It's like imagining that Hollywood's core business model is "producing great works of art that will enrich the minds and spirits of the people and stand the test of time."

[Lewis Carroll]

"Also, I do dimly recall a time that insurance companies didn't cancel policies whenever it suited them. Is my memory faulty, or was that actually ever true; and, if so, when and why did it change?"

No, Casey, your memory is not faulty, at least as far as my experience with health insurers is concerned. And as a broker for >20 years, that experience is pretty extensive.

I would say that the turning point as far as duplicitous company practices in the health insurance industry started when the critical mass of policies began to be issued by public, rather than mutual, companies.

There are a lot of areas where the market provides a great deal of value and enhancements, but there are some things it touches that it turns to $hit. Health insurance is one of the latter, IMO. I obviously can't prove a direct connection between the two trends (stock insurance compnanies gaining market share and nefarious industry practices), but there are an awful lot of perverse incentives created when you start to consider the paying of claims (which you're contractually obligated to do) as *losses*, and next quarters numbers as the holy grail.

[JanieM]

Lewis Carroll's observation raises an even more depressing question: what does "health care" turn into when hospitals change from non-profit to for-profit ventures?

[elm]

efgoldman: Do you refer to Aetna Health v. Davila and Cigna v. Calad et al.? That decision effectively overturned State laws on insurer liability by upholding ERISA's preemption of State law.

[Marty]

"Lewis Carroll's observation raises an even more depressing question: what does "health care" turn into when hospitals change from non-profit to for-profit ventures?"

It turns into an industry. We tend to think of it as good guys and insurance companies as bad guys. That way the bad guys are faceless corporations we can be mad at. The healthcare industry now accounts for more than 16% of our GDP. Those people make money.

As I have said, and I think Russell has said, the insurance industry has problems, but the delivery of health care is a different problem that requires attention. It is also more responsible for rising costs than the insurance guys.

[Jacob Davies]

I understand the perverse incentives of course. I just don't understand why insurance regulators would stand by and let companies create retroactive cancellation departments or let them get away with retrocancellations for unrelated pre-existing conditions.

PG&E has an incentive to take my money but not invest in enough infrastructure to ensure stable supply. That's what regulators are for! Where are the health insurance regulators and why aren't they empowered to threaten to shut down or take over misbehaving companies the way that banking regulators are of banks?

I mean that's a pretty simple thing to deal with. "Retroactive cancellation for bogus reasons will mean your company will be taken over by the state regulator and top management will be fired." So... where are they?

[publius]

mckinney- i think you've inspired me to do a full post on this. in theory you're right, but you can't assume away transaction costs. filing a risky litigation against an insurance company w/ the best corporate law firms in country isn't easy.

the rights exist on paper, but it's expensive to get them enforced

[mckinneytexas]

Publius--I look forward to your post. You might begin with tracking down a CLE article on the Texas Insurance Code. There is an automatic 18% penalty for nonpayment of valid claims within 60 days, a treble damages statute, mandatory attorney's fees award, prejudgment interest and court costs. It would make a good national model.

The lawsuits are risky in the sense that, yes, any suit can be lost. However, unless an insurer can latch onto ERISA pre-emption--which is an easy congressional fix--they are stuck with state court remedies, which, if I were passing laws, I would federalize. I take these kinds of cases on a contingency and so do many other capable lawyers. Most insurance companies don't hire the best corporate law firms in the country because the cost of defense is about ten times the amount in controversy. They hire people like me, whose rates are in line with actually being able to afford to go to trial (Disclosure: I represent two major casualty insurers and have litigation going against pretty much every other major insurer). If you really wanted to put teeth in the statute, you could fold in either a minimum, mandatory contingency fee (say 33%) or have attorney's fees set by the court using standard Bankruptcy court fee schedules as the model.

Since we are neighbors, I'd be happy to sit down and go over coverage litigation with you, if that is of any interest. There's a timing issue, since I start a trial this coming Monday and am pretty jammed getting ready (yeah, i know, quit trolling at ObsidianWings).

JanieM raises the perfectly valid point that people can 'go bare' and only insure if and when they get sick. Fair point. The larger answer is: we don't need health care reform, we do need insurance reform. I think a corollary to eliminating pre-existing conditions from insurability is mandatory coverage. Failure to apply for and obtain insurance by a date certain would subject the insured to a pre-existing condition exclusion (the feds would subsidize premium payments through tax credits for lower income insureds). But I would keep the system private. I would federalize the regulation of health insurance only, so that there are universal and audited capitalization and reserving requirements and, most importantly, a single basic policy form that is judicially construed the same throughout the country. I would establish an 'assigned risk' pool for high-risk insureds, much like states have an assigned risk pool for high risk employers to get workers compensation insurance.

There's more, but I am a bit slammed.

[JanieM]

mckinney, thanks for the lengthy response.

[liberal japonicus]

It tells me something that I can find any number of lawyers advertising their services for product liability ("contact me now if you think asbestos is involved!") yet there is no comparable group of people advertising that they are pursuing suits based on rescission.

Maybe the market is telling us something...

[Jesurgislac]

McKinneyTexas: The larger answer is: we don't need health care reform, we do need insurance reform. I think a corollary to eliminating pre-existing conditions from insurability is mandatory coverage.

I believe what you're fumbling towards is the French model - la Couverture maladie universelle. There's a fairly clear explanation here (intended for Brits who are intending a more-or-less permanent move to France, so it takes for granted NHS-level standards of care, a baseline well above the US standard). French healthcare is the most expensive in Europe, costing 11% of France GDP: but on the other hand, they get excellent results.

The fantasy that right-wingers have that an improved healthcare system can be had by still allowing it to be run by private companies anxious to make the most possible money out of it, is just a fantasy, though.

[gwangung]

Heh. These are the threads I love, where people I don't agree with a lot of the time, come up with posts that make me stop and think. I may not change my position, but I may change my thinking.

[john miller]

mckinney, That was a nice explanation, however, I am wondering exactly how Texas defines a valid claim. In many states there are laws which require payment of clean claims within a certain timespan or penalties zpply bas well as the payer being required to pay the providers whole charge rather than from a negotiated rate.

However, all that is assuming that the patientr is eligible under the insurance plan. And that is what has comew into question many times. Sure, we can say stop the recission, stop pre-existing conditions, etc. However, generally speaking, on any application for anything, there is a requirement for full disclosure and not stating or misstating something can be cause for the contract to be nullified.

To be honest, I can't see the Republicans coming on board anything that really can cause any restrictions on the insurance companies. It was a struggle to get any kind of mental health parity in insurance, and the few Republicans that finally voted for it several years ago put in conditions that basically nullified anything positive in the law.

[liberal japonicus]

A pdf of a case study of claims underwriting and rescission in Texas can be found here. It notes

However, from 2003 to 2007, only seven of the 6,377 policyholders known to have had their coverage rescinded contacted TDI with a complaint--and only one of those complaints was determined to be justified. This suggests that the Texas consumer complaint database is not a good indicator of the size or scope of the rescission issue in the state.

I wonder if this could be related to the 'take no action' thread...

[Lewis Carroll]

At this point I guess I'm just wondering what health insurers DO for their 20-30% overhead. I mean I know what I specifically do. But it's within the context of the system we have, which is a lousy one; I can personally attest to that having had a pretty close look at it for a long time. I get paid a few % of premiums to help policyholders navigate the absurd labyrinth of policy coverages, rules, exclusions and company strategies for not paying claims. It's exhausting and often very depressing. To me, the insurance of health for profit just doesn't work.

Yes, many of us do make $$ off of this sytem, as Marty alludes to. But consider the counterfactual. I mean, the additional mark-up that goes to health insurer overhead would go somewhere else absent the need for private insurance. It would be spent on some other goods or services, and create multipliers in the economy too. Why should all of the implicit COSTS of such a system (medical bankruptcies even of insured people,the crimping of entrepreneurship, the challenge to the competitiveness of businesses that require human labor, the 'tax' applied to both insureds and providers via the extra time and effort to chase claims etc.) be outweighed relatively narrow interests of those who work in the sector?

Even from an egocentric perspective, I'm optimistic that some of that freed up money would find its way into other products and services that I offer.

I guess I'm just trying to say that I see so many problems with treating health care as a commodity that are easily curable with a single payer plan and that's why I favor one.

[Carleton Wu]

The lawsuits are risky in the sense that, yes, any suit can be lost.

That seems like a pretty flip analysis. Many people will never even see a lawyer, or may find themselves too burdened by immediate needs (both financial and related to the illness/accident) to pursue a case to the end- a quick, cheap settlement might look better.
So, the risk isn't just losing- it's the timing, and the day-to-day needs of the plaintiffs.

Some time ago I was working in a warehouse, and a guy had his foot run over by a forklift and broken. I was in the guard shack (side benefit of being a security guard, one becomes invisible in many circumstances) and listened to a manager explain the situation to the worker. It's important to note that this guy, like many working there, lived paycheck to paycheck.
The manager explained that the worker could sign a form indicating that the accident was his fault, and then the company would give him some compensation and time off to recover. Or, he could not sign the form, in which case the company would blame him for the accident and fight him for every dollar.
The guy signed the form. Really, what choice did he have? He could sue, but meanwhile he and his family would be living in their car. If he has long-term suffering and loss of function, he's screwed- but then he was screwed the moment the fork ran him over. He was screwed the day he was hired to pick in the warehouse. He was screwed the day he was born.

[russell]

At this point I guess I'm just wondering what health insurers DO for their 20-30% overhead.

That's my question.

We pay them a hell of a lot of money. What do we get for it?

If I want to mail a 1 ounce letter and I can live with it getting there in a couple of days, I spend 44 cents on the PO. If it absolutely *must* be there tomorrow, I'll spring a few bucks for Fedex.

The value equation is pretty clear.

What do private insurers bring to the table?

Everybody's gotta pull their weight. I sure as hell do, if private insurers want a public option off the table I need to know what I get for the $$$ they skim off the top.

It seems like a pretty reasonable question.

[liberal japonicus]

related to that, Yglesias compared the Baucus bill to the Swiss system, and Scott Lemieux notes that

Even more important, however, is the fact that the Swiss system bans for-profit insurance carriers from participating in the basic system.

[mattH]

Its a SCOTUS thing. Sorry I can't cite the case, but Gary Farber looked it up for us several threads ago. The nut of the decision: If an insurer is sued for cancelling or failing to provide coverage, and loses the case, it is liable only for the benefits that would have been paid out if the insurer had covered the treatment/operation/care/whatever.

Probably State Farm v Campbell. There's more detail to the story than what's there, but it gets the gist of it, and the due process justification that makes it unfair to levy punitive damages beyond a 9-to-1 ratio to compensatory damages.

[CharlesWT]

BISMARCK, N.D. — Blue Cross Blue Shield of North Dakota used premium payments to fund $15 million in employee bonuses, cover $35,000 for a retirement party and pay for other questionable expenses, according to a state audit released Tuesday.

Insurance Commissioner Adam Hamm said he ordered the company to make changes after insurance examiners found inappropriate or excessive expenses paid with policyholders' dollars. He said the nearly inch-thick report raised questions about compensation, travel policies, investments and severance packages.

Hamm said the report showed "a lack of judgment" by board members and senior management. It was the first audit of the nonprofit company since 2004.

"I expect and demand that those things won't happen again," Hamm said.

Company officials said Tuesday that changes were already being made when Hamm ordered the audit in March, following criticism of a sales managers' trip to the Grand Cayman Islands that cost $238,000. The company's chief executive at the time, Mike Unhjem, was fired later that month.
[...]
ND audit: $35K party, $15M bonuses at Blue Cross

[mckinneytexas]

Very quickly:

1. A single policy form produces uniform coverages at a basic level, analogous to the standard auto or homeowners policy. Like even the Public Option, it would have defined benefits. Not anyone is saying the Public Option would cover everything, rather, they say it would provide a 'basic' package, leaving 'basic' to the imagination of the voter.

2. Generally, under Texas law, insurance policies are construed broadly in favor of coverage, exclusions are construed narrowly. Ambiguities are resolved in favor of coverage if there is any reasonable construction of the policy language that so allows.

3. Against the background of #2, construing an insurance policy is no different that construing any other contract, except that insurance policies are insured-friendly and commercial contracts are party-neutral. This runs against conventional wisdom, but it is nonetheless the case.

4. As for lawyer advertising to take on insurance companies, you can't turn on the TV in the greater Houston area without seeing ad after ad soliciting cases against property insurers post-Hurricane Ike. Disclosure: I'm on the defense side of some of that.

5. ERISA is the primary culprit that stands between consumers and a fair day in court. Eliminate ERISA protection or amend the statute, and watch health insurers take a much different view.

6. Carelton, somewhat flip, but true nonetheless. I am going to trial next week and I fully expect to win, yet I never guarantee the result, just my best efforts to achieve the result. Ninety-five percent of cases settle. Your forklift example, however, is a poor example of anything. I don't know where you live, but I assume it is a state with a worker's compensation scheme. Worker's comp is a barely adequate remedy for an injured or killed worker, but the offset in favor of the worker is that the worker's own fault is irrelevant to the claim. In your example, either the employer was one of a very small minority that does not carry comp and is highly unethical or there is more to the story than meets the eye. Let's assume the employer was just a quasi-criminal. Passing a Public Option will not cause the lion to lay down with the lamb. Bad people will remain bad and will cheat, lie, etc. to avoid paying what is owed.

7. Where the friction lies in health insurance is the description of what is covered. The language is inherently gray and insurers trade tough on expensive, arguably unnecessary treatments. I cannot imagine a Public Option dedicated to reducing costs will be any different. In the government's case, because there will be no meaningful remedy, it is outright rationing: insureds will get what they get, and nothing more. Being human,some will die or sustain lifelong health problems because a treatment modality was not within the claims person's list of approved services. The difference between a private entity and the government is that the insured has a remedy. Insurers weighing the cost of treatment against a lawsuit will usually opt for the economic route which is pay the claim.

8. Before going full blast into a bill, or bills, that no one really understands, why not try an interim step of serious insurance reform and see if all of this other stuff is really necessary?

[russell]

Where the friction lies in health insurance is the description of what is covered. The language is inherently gray and insurers trade tough on expensive, arguably unnecessary treatments. I cannot imagine a Public Option dedicated to reducing costs will be any different.

Because we have significant populations insured by both public and private providers, we're in the interesting position of being able to compare the two in terms of real cases, rather than in terms of hypotheticals.

Can anyone point to research comparing the performance of public providers relative to private providers in terms of refusal to pay for recommended treatments?

I'd be interested in seeing it.

[Carleton Wu]

Worker's comp is a barely adequate remedy for an injured or killed worker, but the offset in favor of the worker is that the worker's own fault is irrelevant to the claim....Let's assume the employer was just a quasi-criminal. Passing a Public Option will not cause the lion to lay down with the lamb.

First, I didn't know that about workers' comp. Likely, the worker didn't either. Which is precisely the point- many people are unaware of their legal rights, and therefore a system that relies upon self-aware enforcement of legal rights via lawsuits is bound to leave many behind. While maintaining the fiction that they are, in fact, protected from exploitation.

Second, I wasn't trying to make a particular case about workers comp, but about the tenuous nature of many workers' financial situations. This, combined with ignorance, makes it likely that the only people who will be able to take full advantage of the courts are those who have the knowledge (ie usually the better-educated workers) and financial wherewithal to wait for a better settlement offer or a verdict.

[Jacob Davies]

I just wanted to note what a pleasure it is to have someone making reasonable arguments in good faith in opposition to what I think is a good idea, as mckinney is here.

But I still think the public option is a good idea. The best argument against it is this:

"In the government's case, because there will be no meaningful remedy, it is outright rationing: insureds will get what they get, and nothing more."

Two responses: one, there is a meaningful remedy with a public system; you can pressure politicians to direct the health system to cover a certain type of treatment. (More generally, you can pressure them to fund the system sufficiently to cover a whole range of more expensive treatments.) Of course, that is not something easily pursued on an individual basis, but on the other hand it also means that the burden of pushing for expanded treatment options doesn't fall on individuals who are already dealing with illness. Independent advocacy groups can push for expanded funding. I'm not saying that's an easy thing to do, but it can be pretty effective (look at the AARP & Medicare coverage, e.g.)

Two, because the resulting system will be a mixture of private and public insurance plans, rather than a wholly public plan, and because insurers will be able to write supplementary policies that cover additional treatment options above the standardized ones sold through the exchange, there will be an aspect of competition - as there is at present - where a private insurer may cover a particularly expensive but effective treatment option; the public plan can then be pressured (or shamed, if you like) into covering that option since private plans also cover it.

But it is correct to identify that competition and the ability to vary coverage as a strength of the US system, one that means that a wider variety of treatments are investigated than would be the case with a single uniform system with one set of coverage rules. Unfortunately with for-profit insurers (and non-profit insurers acting like for-profit insurers) that aspect seems to be getting less & less prominent.

[russell]

I just wanted to note what a pleasure it is to have someone making reasonable arguments in good faith in opposition to what I think is a good idea, as mckinney is here.

Seconded.

Conservatives take a beating on this blog, and generally do so with good humor.

Props.

[mckinneytexas]

Thanks Jacob and russell. I have very grave concerns about a full-on federal overhaul of the healthcare system. I could go into great detail, but I just don't have the time. I will say, on the larger picture of having a dialogue, this site is pretty tolerant of opposing views generally and I wish I had more to loiter here.

[elm]

I'll third Jacob and russell's sentiments. A diversity of opinions -- especially when so reasonably argued -- is a great thing to have.

I also strongly agree with Carleton Wu that:

a system that relies upon self-aware enforcement of legal rights via lawsuits is bound to leave many behind

ObWi's audience seems to have a large number of attorneys and legal professionals, but I'm not among them. Reform that relies largely on litigation just doesn't appeal to me. A large insurer can stretch appeals for years, health problems could force me to accept a paltry settlement, and losing a case comes at a horrible cost.

A state-owned insurer would add diversity to the market by providing an alternative to for-profit insurers. I know it wouldn't be perfect, but I'd rather have the choice of dealing with government bureaucrats than private bureaucrats. I'd rather have the choice of a predictable public insurer over a more aggressive private insurer (that I may need to sue for care).

Even if the law is on my side now, it may not be forever. One round of ill-advised "tort reform" could tilt the balance to the side of the insurer. I'd rather take the belt & suspenders approach of civil liability, regulation, and a not-for-profit alternative.

[Lewis Carroll]

Even though I mostly lurk and don't comment much around here, let me *fourth* Jacob's, russell's and elm's sentiments re McKinney. He or she can be my lawyer any time.

Also makes me miss OCSteve. Wonder where he's been.