California Insurance Lawyer Blog

Insurers Are the Last People Who Should Decide How to Reform Health Care

California Gov. Arnold Schwarzenegger late last month proposed controversial health care reform legislation that would ensure everyone in the state has health insurance. As far as we are concerned, it’s an idea whose time has come. And we’re not alone. The measure has already passed the Assembly and most likely will receive Senate approval.

So who is against this plan? Most notably, the insurance industry. According to the New York Times business an insurance industry trade group has come up with its own proposals to help 47 million uninsured Americans obtain health coverage. The trade group acknowledges what most of us have known for a long time: that many insurers are too quick to deny coverage or cancel pre-existing policies of people most likely to need health care. Now they want us to believe they want to fix the problem.

The Times quotes Karen Ignagni, chief executive of America’s Health Insurance Plans, “We are taking responsibility for ensuring that no one falls through the cracks.”

But isn’t the insurance industry the entity responsible for the cracks in the first place? And haven’t they been zealously blocking all attempts to repave the road to affordable health care?

The insurance industry will not – nor should it be given the option to – police itself. Our office files are filled with the heart-wrenching stories of too many people who had to fight insurers to obtain benefits they paid for. Are we now to believe that overnight insurers have decided they really want to help sick people?

Our state government has a good plan that attempts to spread the cost of universal health care proportionally among all stakeholders. The insurance industry is being asked to share their part of the cost. They don’t like it and they never will. And any so-called fix they are likely to devise on their own will certainly be skewed in their favor.

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Posted In: Health Insurance

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In January 2008, Lisa Kantor won an appellate decision for a client suffering from an bulimia. In Jacobs v. Kaiser Foundation Health Plan, Inc., 04-57131 (C.D. Cal. Jan. 30, 2008), Laura Jacobs, was diagnosed with life-threatening bulimia, but was denied adequate treatment by her medical plan provider Kaiser. Kaiser did not offer adequate treatment for plan participants, and declined to refer Ms. Jacobs to an out-of-plan treatment facility. It further refused to pay for the cost of treatment when Ms. Jacobs’ mother obtained the care her daughter desperately needed by checking her into an eating-disorder treatment facility. Although the lower court found that Kaiser had not abused its discretion in denying treatment, the Court of Appeal ruled that her mother’s “decision to take Laura outside the Kaiser treatment system may have saved her daughter’s life.” The case was reversed and remanded with instructions for the lower court to reimburse the Jacobs’ for the non-plan services and to pay Ms. Kantor’s fees and costs.

Although the Jacobs case was unpublished, it is still part of only a few appellate decisions addressing the issue of health coverage for eating disorders. In January 2006, Lisa Kantor previously won the first published appellate decision in an eating disorder case where her client was denied benefits for in-patient treatment of bulimia. In Thompkins v. BC Life and Health Ins. Co., 414 F.Supp2d 953, (C.D.Cal. 2006), the Court of Appeal interpreted California’s mental health parity law AB88 to include beneficiaries who did not live or seek medical care in California. That law requires health insurance policies to cover treatment for mental illness (including eating disorders) on the same terms and conditions applied to other medical conditions. As such, BC Life and Health was obligated to pay Ms. Kantor’s client benefits under its plan.

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Posted In: ERISA , Health Insurance

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