Blue Shield Deposits Lumps of Coal in Stockings Across California

Sad (0.00 / 0)

It's truly a sad commentary on our country that insurance companies can do whatever they want to us.  My mom has high blood pressure - controlled with medication.  Her COBRA supplement just ran out and she applied for individual insurance.  Blue Cross rejected her - she cannot get insurance with them unless she no longer has high blood pressure.  The government gets scape-goated and fear-mongered - but we're happy to let our lives be run by some actuary who's not responsible to anyone the insurance company's shareholders.

---

by: mark @ Wed Dec 16, 2009 at 12:09:11 PM CST

Profits? Shareholders? Not really... (0.00 / 0)

I do agree the revision in grace-period rules is, at best, Scrooge-like and may even be marginally legal, as noted in the article.

But both the writer of the the post and of the first comment seem to believe that Blue Shield of California is a corporation that cares only about "profits" and its "shareholders." It is, in fact, a not-for-profit health plan (there are no shareholders), and it is regulated as such. One might argue that all they care about are their salaries and their balance sheet, but to refer to profits or shareholders here is simply wrong.

See: http://en.wikipedia.org/wiki/Blue_Shield_of_California

---

by: dcloysmith @ Wed Dec 16, 2009 at 13:44:42 PM CST

Duly noted (0.00 / 0)

and updated.

I'm proud to work for Kamala Harris for AG, but my opinions are entirely my own.

---

by: Brian Leubitz @ Wed Dec 16, 2009 at 14:37:08 PM CST

[ Parent ]

Blue Cross and Blue Shield are not the same thing (0.00 / 0)

"In 1994, the Blue Cross Blue Shield Association changed to allow its licensees to be for-profit corporations. Some plans are still considered not-for-profit at the state level...The 14-state WellPoint is the largest Blue Cross Blue Shield member, and is a publicly traded company."

Anthem Blue Cross of California - which rejected my mom - is a for-profit publicly-traded corporation.  

Here's what Wellpoint's entry says about Blue Cross of CA:

"In July 2008, WellPoint subsidiary Anthem Blue Cross agreed to a settlement with the California Department of Managed Health Care. In order to resolve allegations of improper rescission..., WellPoint paid $10 million and reinstated 1,770 policy-holders whose plans they had cancelled. They also agreed to provide compensation for any medical debts incurred by these policy-holders in the meantime. However, WellPoint did not officially admit liability.

In August 2009, WellPoint's Anthem Blue Cross unit, the largest for-profit insurer in California, contacted its employees and urged them to get involved to oppose the Democratic Party-led Congress' plan for health care reform. "Regrettably, the congressional legislation, as currently passed by four of the five key committees in Congress, does not meet our definition of responsible and sustainable reform," Anthem said in a company e-mail... The proposals would hurt the company by "causing tens of millions of Americans to lose their private coverage and end up in a government-run plan.""

Does it really matter whether we're talking about CEO salaries or CEO salaries and shareholder returns?  Blue Cross and Blue Shield are both part of the problem, and neither one behaves like a "good corporate citizen."

---

by: mark @ Wed Dec 16, 2009 at 15:50:27 PM CST

[ Parent ]

My bad (0.00 / 0)

Mark:

I admit I misread your comment, which I mistakenly assumed referred to Blue Shield, the entity under discussion in the post and article.

As for your question: "Does it really matter whether we're talking about CEO salaries or CEO salaries and shareholder returns?" The answer is surely yes.

First, when we confront the teabaggers and the Ayn Rand charlatans who have controlled this debate so far, we need to look like we know what we're talking about. Blue Shield's not-for-profit status is not irrelevant to this matter; its fiscal responsibilities are far different than (say) WellPoint's fiscal responsibilities. The questions to be asked about a non-profit are different, and there are important legal restrictions governing net income for a non-profit organization and how they can be used and disbursed (I know, since I work for one--outside of the insurance industry, I hasten to add). These differences should inform our discussion of health insurance companies rather than confuse them.

---

by: dcloysmith @ Wed Dec 16, 2009 at 17:01:52 PM CST

[ Parent ]

But is there *really* a difference? (0.00 / 0)

Blue Shield has decided that it can increase operating revenue by finding a pretext for forcing its users to re-apply for coverage, resulting in rejections or increased rates.

This is how a profit-maximizing actuary behaves.  How the funds are disbursed within the organization appears to have no bearing on it.

---

by: mark @ Thu Dec 17, 2009 at 11:18:12 AM CST

[ Parent ]

Well, it might (0.00 / 0)

matter how the funds are used internally.  For example, we have no idea how the executives or analysts are comped.  If their compensation is related to (for example) lower medical loss ratios, well, that's a problem.

---

by: jsw @ Thu Dec 17, 2009 at 12:56:55 PM CST

[ Parent ]

Got one of these letters... (0.00 / 0)

Glad to see the Times shining a little light on this practice.

I got the very letter in question a few weeks ago.  Needless to say it caused a great deal of consternation in the Thompson household.

Good thing it doesn't kick in until the New Year.

Was late on my payment this month by a few days -- well within the grace period that will soon be eliminated.  During that window I sprained my wrist.  A minor thing, but still required an x-ray and some meds.

I paid Blue Cross and they're paying the claim.  Had this been January, I'd have been f'd.

---

by: JeremyDThompson @ Wed Dec 16, 2009 at 21:10:24 PM CST