California Insurance Lawyer Blog

The LTC Guild, a forum for long-term care insurance agents, recently launched its “3 in 4 need more” campaign to educate consumers about the number of Americas over 65 who will likely require some type of long-term care service in their future. According to the U.S. Department of Health and Human Services, that’s about 70 percent of us.

The focus of the campaign is to highlight why long-term care insurance is such a necessity. Medicare will NOT cover most of the long-term care services the majority if us will need. Right now, long-term care is the only safety net for most people. In the highly unlikely event long-term care coverage becomes part of federal healthcare reform, that option may still not pay for the quality of services that a private plan would.

We support the LTC Guild’s public awareness campaign.

For more information about the “3 in 4 need more campaign, log on to http://ltcguild.ning.com/page/long-term-care-insurance-for.

[090916]

“Momentum for health reform may be building again, but interest in improving our system of long-term care supports and services is still lagging,” writes long-term care advocate Howard Gleckman in his newest blog post. Gleckman notes that while the CLASS Act, the late Sen. Edward Kennedy’s long-term care bill, has undergone changes this summer and received President Obama’s endorsement, the legislation could very likely fall victim to the controversy surrounding a public option for health insurance.

But the real reason LTC reform won’t happen is indifference, not opposition Gleckman says. “Overwhelmed by the passionate, high-stakes debate over health reform, many lawmakers remain reluctant to even confront long-term care issues. They are making a major mistake by failing to recognize that the chronically ill need a full range of care that does not end at hospital discharge or when they leave their physician’s office. An elderly widow suffering from Parkinson’s or a young man struggling with multiple sclerosis doesn’t distinguish between personal care and medical treatment. For them, it is all essential care. Congress needs to recognize this, but, at least for now, the odds that it will do so in 2009 remain long.”

So for right now, the best option is still private LTC insurance, or, in some cases, employer-provided LTC insurance coverage, which could be your only safety net if you long term care becomes essential due to age or infirmity. (090914)

“Most Americans do have insurance and have never had less security and stability than they do right now because they’re subject to the whims of health insurance companies,” President Obama told a group of nurses, speaking from the White House the morning after his Sept. 10 address to a joint session of Congress about his plan to overhaul the nation’s healthcare system. “Obama Keeps Up Health Care Push, Citing Uninsured,” New York Times.

As part of his Wednesday night speech, the president said the legislation he seeks would guarantee insurance to consumers, regardless of pre-existing medical conditions, as well as other protections. “As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most," he added. Obama: Time for Bickering Is Over,” Associated Press.

Even though the bulk of the healthcare debate tends to focus on the issue of whether our country could support both private and public health insurance options – we believe it can – the real truth about the way the insurance industry does business cannot be over-emphasized.

The president has it right when he says health insurers must be held accountable. At the very least, any federal health care legislation should mandate that sick people get the coverage they pay for without delays or denials, time-consuming procedures, and claims adjusters forced to be more concerned with limiting benefits than caring for their customers.

Although legislators are showing concern that the debate has become “uncivil,” real progress toward insurance reform necessarily requires a vigorous airing of the issues. We applaud those lawmakers who refuse to bend to the insurance industry’s “whims.”

Just when the California Legislature shows some backbone and passes legislation to end the insurance industry practice of canceling some policyholders’ coverage after they get sick and incur medical expenses, the measure could reach a dead end in the governor’s office. Gov. Arnold Schwarzenegger has threatened not to sign any bills until the Legislature makes progress on the state’s water crisis issues, prison overcrowding or confirmation of the governor’s key appointees. See “Health Bill Heads to Governor,” Los Angeles Times.

Last year, the governor vetoed a similar bill, but that was before reporting, led by the LA Times, documented how widespread the practice, known as rescission, really is. The Department of Insurance, responding with outrage over the unethical practice, is proposing its own solution to the problem.

In any event, we think it is unsavory to use sick people as political bargaining chips. Our state needs lots of work and another stalemate in Sacramento won’t help consumers. The insurance industry is likely out celebrating once again.

[090909]

California Attorney General Jerry Brown announced he will begin scrutinizing how health plans in California pay insurance claims, reports the Los Angeles Times. This move was based in part on a recent analysis published by the California Nurses Association that found six of the state’s largest plans rejected one in five claims during the past seven years - “State to Probe Insurer Denials.”

“These high denial rates suggest a system that is dysfunctional, and the public is entitled to know whether wrongful business practices are involved,” Brown told reporter Lisa Girion.

Brown joins other state regulators, most notably the California Department of Managed Health Care, responsible for policing the health plans. The DMHC, however, reacted defensively to the nursing association’s analysis, claiming it has “been very active in ensuring that providers of care should be paid fairly and on time.”

The insurance industry asserts that the analysis “mischaracterizes” claims data and “does not accurately reflect denials of care for insurers,” even though the numbers the association used to compile its report came directly from the companies own filings with the DMHC.

Although we and many others have frequently accused health plans of improperly denying claims, the Nurses’ Association analysis is the first-of-its-kind report to provide such concrete evidence.

We urge Attorney General Brown to use the powers of his office to conduct more than a cursory examination of this issue, perhaps resulting in something more than the usual slap on the wrist and innocuous fines typically imposed on the industry. Now is the time to institute structural reforms that could revolutionize health care in California, particularly since federal attempts to hold the insurance industry accountable have been compromised by the industry’s unprecedented lobbying. (090904)

According to the California Nurses Association, California HMOs rejected one out of every five claims for medical care between 2002 and June 2009, reports Lisa Girion of the Los Angeles Times. That’s 31.2 million claims, or 21 percent of all claims during that period.

For the first half of this year, Aetna had the lowest denial rate -- 6.5 percent; PacifiCare the highest -- 39.6 percent. Anthem Blue Cross and Kaiser each rejected 28 percent of claims, and Cigna denied 33 percent.

Although such high denial rates aren’t news to us, it’s rewarding to see empirical data that supports our assertions that health insurers tend to delay and deny claims until policyholders are forced to sue them to receive the coverage they pay for. Sure many denials are justified due to actual misunderstandings about coverage, but far too many denials are improper, and even oppressive.

The nurses association used public data from the health plans’ financial reports posted on the California Department of Managed Care’s website to conduct its analysis. “Every claim that is denied represents a real patient enduring pain and suffering,” Deborah Burger, co-president of the California Nurses Association, told the Times.

Typically, the health plans denied the association’s analysis of their reports, stating that “claim rejections reported to regulators do not always reflect actual denials of treatment to patients.” Maybe not always…but often!

DMHC spokeswoman Lynn Randolph told the Times, “It’s important to point out that a denied claim means that the patient received the medically necessary services, but the doctor or hospital was not paid for that care.”

But what’s the difference? Doctors and hospitals are going to bill someone. If the health plan won’t pay claims, policyholders are then forced to pay out of their own pockets. People don’t buy health insurance for the benefit of hospitals and doctors; they purchase coverage so that in the unfortunate event they face catastrophic health challenges, they can get the medical care they need without going bankrupt!

Both the insurance industry and the California Department of Managed Healthcare fail to appreciate the pain and suffering endured by those whose claims are denied. Try being seriously ill, enduring the stress and indignity of life-saving treatment, then finding out your insurer won’t cover your bills. Now that’s real suffering.

For a copy of the California Nurses Association analysis, go to http://www.calnurses.org/media-center/press-releases/2009/september/california-s-real-death-panels-insurers-deny-21-of-claims.html.