RandomGuy
03-02-2010, 10:27 AM
By SHAYA TAYEFE MOHAJER, Associated Press Writer Shaya Tayefe Mohajer, Associated Press Writer – Tue Mar 2, 4:43 am ET
LOS ANGELES – Mary Feller's family of three spends nearly $25,000 a year on health insurance premiums, which is more than they pay on their home's mortgage in California's Marin County.
"I think for the first time we're really scared that we're going to be without health insurance," she said. Feller's especially worried for her 26-year-old daughter, a cancer survivor whose premium has tripled in four years.
That's why she decided to become a plaintiff in a lawsuit against California's largest for-profit health insurer on behalf of policyholders who were allegedly pushed to take coverage with fewer benefits and higher deductibles.
In a lawsuit filed in Ventura Superior Court on Monday, Anthem Blue Cross is accused of violating a California law requiring health insurers to offer new, comparable coverage or minimize premium increases when they close a policy.
According to the lawsuit, plaintiffs Mary Feller and Randy Freed received similar form letters from the Woodland Hills-based insurer, stating their policies were closed and they could "switch to any Anthem Blue Cross individual health plan with no underwriting required."
The lawsuit alleges that the few plans Anthem would allow Feller and Freed to switch into had higher premiums, higher deductibles, less coverage, or a combination of those undesirable traits.
Anthem Blue Cross spokeswoman Peggy Hinz said the insurer hasn't yet reviewed the lawsuit, declining further comment.
The lawsuit seeks class action status and is being brought by Consumer Watchdog, a Santa Monica-based consumer advocacy group, on behalf of Feller and Freed.
When the practice was outlawed in 1993, legislative analysts called it a "death spiral" because rates inevitably increased until policyholders could no longer afford coverage. As the coverage pool shrank over time, rates went up and up.
"It's a very profitable practice, and what we know is the insurance industry is very focused on short-term returns," said Jerry Flanagan, a health advocate for Consumer Watchdog.
The lawsuit comes on the heels of government scrutiny of a steep Anthem Blue Cross rate hike for roughly 700,000 individual policyholders in California. The hikes average 25 percent — some premiums will rise as much as 39 percent — but implementation of the hike has been delayed until May 1 while a state regulator investigates.
Anthem executives have blamed the current economic climate, flaws in the national health care system, high costs of health care and fewer young, healthy people holding onto insurance policies for the rate hikes.
The Obama administration has called Anthem's hike a harbinger of rising premiums in its arguments for health care reform.
In special hearings last week, California legislators and the U.S. House of Representatives questioned executives from WellPoint, Anthem's parent company, about proposed premium hikes in California, Maine and elsewhere.
http://news.yahoo.com/s/ap/20100302/ap_on_bi_ge/us_anthem_blue_cross_lawsuit
---------------------------------
The term for this is adverse seletion. The people who tend to need insurance the most, will be the ones that buy into it.
This particular self-feeding cycle is playing out on a national scale, as more and more people are rationed out of health care by dint of rising insurance premiums.
Yeah that's right, I said rationed.
People whose income is low enough can go to the safety net of Medicare/-aid, but those who don't qualify for that will go without.
This trend will accelerate, as premiums rise faster than incomes, and the "death spiral" of private health insurance continues.
The leading causes of bankruptcy appear to be medical bills.
http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html
Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.
The study estimates that medical bankruptcies affect about 2 million Americans annually -- counting debtors and their dependents, including about 700,000 children.
More recent studies done since 2001 have suggested the trend I mentioned accelerating:
BACKGROUND: Our 2001 study in 5 states found that medical problems contributed to at least 46.2% of
all bankruptcies. Since then, health costs and the numbers of un- and underinsured have increased, and
bankruptcy laws have tightened.
METHODS: We surveyed a random national sample of 2314 bankruptcy filers in 2007, abstracted their court
records, and interviewed 1032 of them. We designated bankruptcies as “medical” based on debtors’ stated
reasons for filing, income loss due to illness, and the magnitude of their medical debts.
RESULTS: Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these
medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for
medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical
bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three
quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable
to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors,
the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.
CONCLUSIONS: Illness and medical bills contribute to a large and increasing share of US bankruptcies.
http://pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf
-----------------------------------------
Market-based health insurance is failing, and there is little we are doing to stop it, because it "costs too much".
Ok, tea-baggers, free-market your way out of this problem. :p:
We will ignore the problem until enough people are willing to vote for a public option, because there will be no free-market private option.
LOS ANGELES – Mary Feller's family of three spends nearly $25,000 a year on health insurance premiums, which is more than they pay on their home's mortgage in California's Marin County.
"I think for the first time we're really scared that we're going to be without health insurance," she said. Feller's especially worried for her 26-year-old daughter, a cancer survivor whose premium has tripled in four years.
That's why she decided to become a plaintiff in a lawsuit against California's largest for-profit health insurer on behalf of policyholders who were allegedly pushed to take coverage with fewer benefits and higher deductibles.
In a lawsuit filed in Ventura Superior Court on Monday, Anthem Blue Cross is accused of violating a California law requiring health insurers to offer new, comparable coverage or minimize premium increases when they close a policy.
According to the lawsuit, plaintiffs Mary Feller and Randy Freed received similar form letters from the Woodland Hills-based insurer, stating their policies were closed and they could "switch to any Anthem Blue Cross individual health plan with no underwriting required."
The lawsuit alleges that the few plans Anthem would allow Feller and Freed to switch into had higher premiums, higher deductibles, less coverage, or a combination of those undesirable traits.
Anthem Blue Cross spokeswoman Peggy Hinz said the insurer hasn't yet reviewed the lawsuit, declining further comment.
The lawsuit seeks class action status and is being brought by Consumer Watchdog, a Santa Monica-based consumer advocacy group, on behalf of Feller and Freed.
When the practice was outlawed in 1993, legislative analysts called it a "death spiral" because rates inevitably increased until policyholders could no longer afford coverage. As the coverage pool shrank over time, rates went up and up.
"It's a very profitable practice, and what we know is the insurance industry is very focused on short-term returns," said Jerry Flanagan, a health advocate for Consumer Watchdog.
The lawsuit comes on the heels of government scrutiny of a steep Anthem Blue Cross rate hike for roughly 700,000 individual policyholders in California. The hikes average 25 percent — some premiums will rise as much as 39 percent — but implementation of the hike has been delayed until May 1 while a state regulator investigates.
Anthem executives have blamed the current economic climate, flaws in the national health care system, high costs of health care and fewer young, healthy people holding onto insurance policies for the rate hikes.
The Obama administration has called Anthem's hike a harbinger of rising premiums in its arguments for health care reform.
In special hearings last week, California legislators and the U.S. House of Representatives questioned executives from WellPoint, Anthem's parent company, about proposed premium hikes in California, Maine and elsewhere.
http://news.yahoo.com/s/ap/20100302/ap_on_bi_ge/us_anthem_blue_cross_lawsuit
---------------------------------
The term for this is adverse seletion. The people who tend to need insurance the most, will be the ones that buy into it.
This particular self-feeding cycle is playing out on a national scale, as more and more people are rationed out of health care by dint of rising insurance premiums.
Yeah that's right, I said rationed.
People whose income is low enough can go to the safety net of Medicare/-aid, but those who don't qualify for that will go without.
This trend will accelerate, as premiums rise faster than incomes, and the "death spiral" of private health insurance continues.
The leading causes of bankruptcy appear to be medical bills.
http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html
Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.
The study estimates that medical bankruptcies affect about 2 million Americans annually -- counting debtors and their dependents, including about 700,000 children.
More recent studies done since 2001 have suggested the trend I mentioned accelerating:
BACKGROUND: Our 2001 study in 5 states found that medical problems contributed to at least 46.2% of
all bankruptcies. Since then, health costs and the numbers of un- and underinsured have increased, and
bankruptcy laws have tightened.
METHODS: We surveyed a random national sample of 2314 bankruptcy filers in 2007, abstracted their court
records, and interviewed 1032 of them. We designated bankruptcies as “medical” based on debtors’ stated
reasons for filing, income loss due to illness, and the magnitude of their medical debts.
RESULTS: Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these
medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for
medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical
bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three
quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable
to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors,
the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.
CONCLUSIONS: Illness and medical bills contribute to a large and increasing share of US bankruptcies.
http://pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf
-----------------------------------------
Market-based health insurance is failing, and there is little we are doing to stop it, because it "costs too much".
Ok, tea-baggers, free-market your way out of this problem. :p:
We will ignore the problem until enough people are willing to vote for a public option, because there will be no free-market private option.