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Tag Archives: health insurance

By Ian Wasser

In the United States, health insurance benefits are often included in employment compensation packages.  Thus, to be insured, one must typically have a job.  But what happens when there is racial inequality in the job market? Does this translate into minority groups essentially being denied health insurance coverage and therefore having an unnecessarily higher mortality rate?

The answer might be yes.  According the the Bureau of Labor Statistics, unemployment rates differ between majority and minority groups.  For instance, in 2003, the unemployment rate for white males was 5.0% while the unemployment rate for african-american males was 10.3%.  If health insurance is exclusively linked to employment, then clearly twice as many african-american males are being denied health insurance coverage when compared to white males.

As applied, the health insurance regime in the United States clearly violates the equal protection clause of the Fourteenth Amendment.  Specifically, the practice of linking health insurance to employment places an often already disadvantaged class of people into a position of further disadvantage.  This translates into poorer health and higher mortality.  Can it then be said that employment-linked health insurance, on the whole, is Unconstitutional?

By David McClard

The cover article in this week’s Houston Press illustrated an interesting battle going on between a Texas workers’ compensation insurance carrier and its unfortunate policyholders. Texas Mutual Insurance has recently appealed to the 14th Appeals Court a bad-faith judgment in which it was found to have caused undue suffering by wrongfully denying a claim. The insured in this case had a back injury which worsened over several years and TMI had denied paying medical bills for years. This was the second bad faith claim that TMI had lost, the first being a case where an adjuster had added a word to the insured’s doctor’s notes.

The lead counsel for TMI and senior vice president, Mary Nichols, has an interesting proposition in her appeal. She wants the higher courts to eliminate bad faith damages from workers’ compensation suits. In her words: “We’re going to be paying for [the insured’s] injury. We pay for unlimited lifetime medical. So if we delay your shoulder surgery and your shoulder gets worse, that’s still our nickel… That’s not a separate and independent injury. That is the comp claim that we are taking care of. That’s the shoulder that we bought.”

Mrs. Nichols could probably work on her choice of words, but more importantly, maybe reconsider the public policy issue at hand. Insureds who fight a workers’ comp claim must go through the internal complaint system, which is a series of mediations and hearings that can last for years, or hire a lawyer and haul the case through potentially multiple courts. If TMI has it their way, workers’ comp carriers could delay and deny payments through any manner of fraudulent means, and ultimately be subjected to nothing more than compensatory damages. All the while, they could drag the insured through a punishing internal review and civil court/appeals process without any worry of being punished for misrepresentation or fraud.

It remains to be seen if Texas Mutual will prevail in changing Texas law on the matter, but for the sake of policyholders who have the misfortune of being injured on the job, one would hope that it does not.

By David McClard

recent article in the New York Times financial section described a horror story involving an insurer whose protracted financial meltdown caused the loss of $4.5 billion to its policyholders, including over a million dollars for a little girl with a hospital visit-caused brain injury.  The author made the assurance that such financial fiascos are rare with insurers because of the strict guidance and watchfulness of state insurance regulators. (But this assurance contains no consideration of the limited ability of insureds to collect more than remedial sums in ERISA-governed plans, thanks to O’Connor’s dicta in Pilot Life v. Dedeaux.)

The economic situation is now roundly considered precarious in almost every sector, and life and health  insurance companies do not seem to be the exception. For anyone who is convinced that their insurer is on the brink of a collapse, they are forced into the unenviable position of having to chose whether or not to pull out of a policy prematurely. It’s usually not something an insured ever wants to do (because of tax issues, penalties, paperwork, et al), but if it has to be done, there are some tips on making the next step a safer one:

1)When choosing a new insurer, consult with more than one agency rating. Each have their own criteria for rating insurance companies, so results may vary. The major raters A.M. Best, Fitch Ratings, Moody’s and Standard & Poor’s. 2) When shopping among the top-rated companies, be wary of terms which seem too good to be true, and exotic riders to policies. 3) Be extremely careful of gaps in coverage when switching policies. 4) Spread coverage over two (or three!) policies to hedge against an insurer financially tanking.

This advice is understandably disheartening, since it implies that the life and health insurance industry is now more than ever full of dangerous pitfalls.

By Quianta Moore

The statistic that health insurance is the No. 2 cause of death is quite shocking. Even if those numbers are exaggerated, any deaths caused by the stress and agony of dealing with insurance companies seems to defeat the purpose of health insurance. The article focuses on high deductible HMO’s, which made me think of McCain’s health plan. We did not fully address in class the consequence of allowing people/employers to purchase health insurance across state lines. If certain states are more “favorable” to insurers by not requiring coverage for pre-existing conditions, then most healthy people will choose to purchase insurance in those states because the plan will be cheaper. That leaves all the high risk sick people in the states that require coverage for pre-existing conditions. McCain proposes these states have a “high risk coverage” for the sick, but because the so called “community rating” will be based on all sick people the premiums will either be much higher or the deductibles will be higher or both. If the article is true, do we care that people are dying as a result of these policies? Also, who will pay for those who cannot afford these new deductibles/premiums? It seems like the states who require coverage for pre-existing conditions will ultimately be burdened with this high risk pool and have no incentive to continue to have laws that require coverage for pre-existing conditions. I guess eventually the healthy people then would be evenly spread out once no state requires pre-existing conditions, but how long will that take? Overall, I think it would be okay for people to purchase plans in the individual market, but the adverse selection problem really bothers me. Does anyone else see a solution to this problem?

By Ian Wasser

Recently, I went to the doctor for my annual checkup.

It was time for me to update my immunization against tetanus and diptheria.  A standard immunization, and one that would seemingly be covered by health insurance.

I don’t have the student health insurance plan.  Instead, I am insured through my wife’s employer.  We have a good health plan–a nice, high deductible PPO plan that covers almost everything.  Not gold-plated like a Congressional plan, but certainly not the bare minimum of coverage.

Much to my surprise, I learned that routine immunizations for people over 18 are not covered.  The only exception is yearly influenza vaccination.  I checked my policy–sure enough, immunizations were listed as an exclusion.

The interesting part is that while immunizations are excluded, the administration of injectable medicines are covered.  The doctor’s office billed the immunization as two charges–one for the medicine and one for the administration of the drug.  Both charges were rejected by my insurance on the basis of being excluded.

My question is this:  I agree that the cost of immunization is not covered.  That is clear from the policy language.  The immunization was injected, however, and injections of medications are not excluded from the policy.  Is it worth a fight to get the insurance company to cover the cost of receiving the injection?

And, more importantly, shouldn’t all health plans include coverage for routine immunizations?  Why don’t states mandate such coverage?  After all, people only need these immunizations on an infrequent basis.  And failure to take the precaution of getting immunized creates a much greater risk for the insurance company–should I become infected with tetanus, the cost of treatment would certainly exceed the cost of immunization.