Tuesday, September 15, 2009

Are the insurance companies gearing up for health care reform?

And by "gearing up," I don't mean anything nice.

I wouldn't be surprised if the health insurance companies are a little bit worried about losing money when the reform bill passes. (Notice I said when, not if — I think something will pass, the only question is whether or not it will have a public option.) Something my mom told me about the other day certainly makes me wonder if this kind of thing is a preemptive strike, to lock in certain discriminatory policies before health care reform makes it impossible for them to makes these kinds of changes.

My mom was talking to someone at her work who has type 2 diabetes. Since it's a state job, they don't pay a very large portion of the employee's health insurance policy, so he has Kaiser — a health insurance company in Colorado that has all its own doctors, and is therefore usually cheaper than other insurance companies.

Anyway, they apparently decided they were losing too much money on him, so they cancelled his policy. Yep — just up and cancelled it. This is apparently a growing trend: A recent article talked about the growing number of rescissions, which is where insurance companies drop policyholders because they cost too much. The insurance companies, of course, claim it's because of fraud, but we know better.

In this man's case, however, they cancelled his policy, then told him to reapply. His new policy cost four or five times more than the old one, which seems to be why they cancelled his policy: so that they could raise his rates.

To add insult to injury, it turned out that he also had to make a deposit for the new policy to take effect — and they withdrew the money directly out of his account. This was, of course, hidden in the 30 pages of small print in the contract.

This seems to be the case with other insurance companies, as well. A survey was done that indicates health costs will be rising. It sounds like employers are coping with rising policy costs by passing on some of the price increases to their employees.

If you ask me, I think health insurance companies are concerned about the possibility that a health care reform bill will pass; I'm sure the thought of a public option particularly alarms them. To cope, I think they are raising costs across the board, and doing what they ccan now to dump (or overcharge) policyholders who cost them money. After all, when the legislation does pass, they may not be able to raise costs again (or discriminate against people) so easily, so they are probably trying to lock in as many of these changes as possible now!

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