While Barack Obama is fumbling around for a consensus on national health care, those who don’t have the kind of insurance that comes with being a member of Congress face cancelled policies for the grave offense of simply filing a claim:
State regulators said they are fining Blue Cross of California $1 million for “routinely” canceling health insurance policies of individual members who filed claims.
The Department of Managed Health Care based the fine on a survey of 90 policies randomly selected from among 500 that Blue Cross rescinded in 2004 and 2005.
Investigators found in all 90 cases that Blue Cross failed to comply with a state law that allows rescission of coverage only if the insurer proves members intentionally withheld information on pre-existing conditions when they applied. State officials said Blue Cross did not prove the rescissions were warranted.
Those on the market-worshiping right will tell you that Blue Cross of California will pay a price for this behavior in the form of decreased demand for their products due to lower perceived value vis-Ã -vis their competitors who don’t cancel policies in violation of state law. But this assumes a lot, including that those consumers who lost coverage were able to find new coverage before thousands of dollars of additional bills accrued, and the fact that since Blue Cross of California was the first company audited, the other insurers may well be conducting business in exactly the same manner.
The Market is simply inadequate when it comes to many things, and health care delivery is chief among them. The current President has made it clear through his inaction in the face of the rise in uninsured Americans, and his recent counterproductive health care tax cut proposal (covered here, here, and here) that he doesn’t intend to fix the problem. The next President will inherit a situation worse than the one today. There is no time to waste, the American people need to be made aware of the nature of the change that is needed, and the sooner the better.