A few months ago, there was great hope that the Department of Managed Health Care was going after the big insurance companies on the rescission of individual policies.  The DMHC is an executive department, and thus reports to Arnold, not to the Insurance Commissioner (Poizner). So, a few weeks ago we got the news that the DMHC called off the dogs against Blue Cross because they knew Blue Cross would just litigate them to death. Or something like that.

I know, it’s shocking that Arnold’s administration wouldn’t pursue a corporation, but they thought it better just to let BC get off on that charge and settle with them elsewhere.  Ther problem with that? The settlement that the DMHC agreed to with the biggest five insurers in the state is barely a slap on the wrist.  The new procedure requires patients to go through a vague arbitration procedure where they have to prove their case.

Mind you the arbitrator will see far more of the insurance companies than the patients. Where do you think this is going? Yup, just like other arbirtration settings this is going to end up favoring the big company. By the by, that link above states that 99.8% of the cases filed by consumers against credit card companies decided on the merits end up with the company winning. 99.8%! That’s a track record minor deities wouldn’t mind. And even when they get to the arbitrators, cases under $15,000 will typically be decided on the paperwork only. Furthermore, the settlement doesn’t define any legal standards for these decisions, but it appears the legal burden of proof is on the patient to prove he didn’t lie rather than the insurer to prove they did.

This is no victory at all.  And that’s part of why LA City Attorney Rocky Delgadillo filed suit against Blue Shield in mid-July.

“For decades, health insurers have gamed the system and reaped billions,” Delgadillo said. “The time has come to . . . set things right.”

The suit also accuses Blue Shield of falsely advertising its coverage, alleging that the company often reneges when its members need substantial medical care.

Dr. Richard Frankenstein, president of the California Medical Assn., and Dr. Robert Bitonte, president-elect of the Los Angeles County Medical Assn., praised Delgadillo’s efforts to stop the practice known as rescission. (LAT 7.17.08)

Single-payer (likely at the national level) is the ultimate solution, but meanwhile, back in reality land, the insurers are getting off scott free. If the DMHC is going to claim to do its job, it can’t leaving gaping loopholes like this. Delgadillo and other attorneys will have to press the insurance companies for every last concession, because they’re not giving anything away for free.

Next week, the State of California will drag Blue Cross into a public hearing and investigate thousands of complaints from policyholders about premium increases, benefit cuts, canceled policies and other practices.

If you had a bad experience with Blue Cross, you are strongly encouraged to submit a public comment. Or, you can sign our petition that will be delivered to the hearing in Los Angeles on August 7.

Blue Cross raked in nearly a $1 billion in profits last year and shipped it off to parent company, WellPoint, based in Indiana. Blue Cross is able to amass such profits because it relies on business practices that harm millions of Californians, such as:

* Spending less of California’s premium dollars on patient care than other larger insurers
* Denying coverage for pre-existing conditions and instead seeking to insure only the healthy
* Selling insurance designed to provide limited benefits, coupled with high deductibles and co-pays
* Raising rates however and whenever it chooses

These business practices are unacceptable (yet completely legal!) — and it’s time for us to put a stop to them.

At Sick of Blue Cross, we launched a petition to urge the state to order Blue Cross to return our money and to pass healthcare legislation to prevent Blue Cross from gouging us and start providing real healthcare.

Blue Cross is not only a leader in health insurance practices that need to be reformed, it is also a leader in the opposition to reform. Blue Cross has already committed $2 million for a campaign to stop health care reform this year in California — and Blue Cross has already run print and radio ads criticizing reform efforts and trying to make Californians afraid of change in the healthcare system.

It’s time for Blue Cross to clean up its act!

We’ll deliver this petition to the August 7th hearing in Los Angeles — and we want your name to be on it.

Sign our petition now — so together we can demand reform and get Blue Cross to clean up its act and return its excessive profits to California!