Insurers behaving badly

An interesting story that provides more evidence that our heath care system needs serious reform:

In 2003, a subsidiary of Conseco, Bankers Life and Casualty, sent an 85-year-old woman suffering from dementia the wrong form to fill out, according to a lawsuit, then denied her claim because of improper paperwork. Last year, according to another pending suit, the insurer Penn Treaty American decided that a 92-year-old man had so improved that he should leave his nursing home despite his forgetfulness, anxiety and doctor’s orders to seek continued care. Another suit contended that a company owned by the John Hancock Insurance Company had tried to rescind the coverage of a 72-year-old man when he was diagnosed with Alzheimer’s disease four years after buying the policy.

This comes just days after California fined Blue Cross -- my own health insurer -- $1 million for improperly denying claims when customers get sick. In both cases, the problem is a serious imbalance of power.

In a perfect world, everyone would be able to save enough during their working years to pay for their own long-term care. But salaries and long-term costs are unpredictable, hence the need the pool risk through insurance. But it's dangerous to put companies in the position of having to choose between your health and its profit. Because unlike other consumer products and services, you can't just move to a competitor when you grow unhappy with your insurer's cost/service balance.

Source: New York Times