Opinion: Wow. Even for insurers, this is evil

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We must be approaching the endgame in the healthcare reform debate. Consider the latest statement from Robert Zirkelbach, spokesman for America’s Health Insurance Plans (the health insurers lobby), which works five (count ‘em five) different and largely unrelated hot-button topics into a mere two sentences:

The current legislation is going to make healthcare even more expensive by imposing billions of dollars in new healthcare taxes and encouraging people to wait until they are sick before getting insurance. Healthcare reform legislation that fails to address costs will set the stage for the nation’s next financial crisis. (emphasis added)

It’s hard to tell where to start rebutting that one, so we’ll just point to our last editorial, which debunked the myth that the bill doesn’t address costs. The bill’s tax penalties might not give young, healthy Americans enough incentive to sign up for policies. The real problem for AHIP, though, is that its members’ abusive cherry-picking practices keep giving lawmakers incentives to vote for the healthcare reform bill.

Consider the case of Jerome Mitchell, a young South Carolinian who signed up for an insurance policy at age 17 but was later diagnosed with HIV. His insurer, Fortis -- now known as Assurant -- summarily canceled his policy after the HIV diagnosis. Mitchell sued and won, and in so doing revealed perhaps the most sinister practice by any insurance company among the many revealed during the healthcare reform debate. Reuters reports Wednesday:

Previously undisclosed records from Mitchell’s case reveal that Fortis had a company policy of targeting policyholders with HIV. A computer program and algorithm targeted every policyholder recently diagnosed with HIV for an automatic fraud investigation, as the company searched for any pretext to revoke their policy. As was the case with Mitchell, their insurance policies often were canceled on erroneous information, the flimsiest of evidence or for no good reason at all, according to the court documents and interviews with state and federal investigators.
So much for government-run ‘death panels.’

Anyhow, there’s little need to make a larger point about the healthcare debate in Congress, since even the most self-assured ‘tea party’ members would say that this kind of practice (and Assurant isn’t the only villain) does deserve some corrective action by lawmakers. But before Mitchell received his HIV diagnosis, his age and even the fact that he bought his own policy suggest he was the kind of customer insurers crave. The young, relatively healthy among us are the least likely to need care, making their premium dollars highly coveted. Persuading more such people to essentially pay for a product they’re likely to use sparingly until they grow older is an important part of reducing the cost of healthcare.

Mitchell essentially bought into that system, and as it turned out, he needed the care. There are other perfectly healthy insured people his age who ended up requiring expensive care but have been denied some of the coverage they thought they were paying for all along. The cases we know of personally, though nightmarish enough for the aggrieved, don’t approach the level of premeditated evil displayed by Assurant.

Update, 10:15 a.m., March 24: Donald G. Hamm Jr., president and CEO of Assurant Health, e-mailed us the following response:

In the push for health care reform, Paul Thornton and Jon Healey wrote that Fortis (Assurant) had a policy of “targeting policyholders with HIV” for cancellation of their health insurance policies. This is not true.

Assurant Health, in fact, insures and pays claims of people with HIV and AIDS.

Over the past ten years, we have insured customers who have been diagnosed with HIV and AIDS. During the time period, we have paid over $87 million in claims on behalf of these individuals.

Additionally, for more than twenty years our company has supported efforts to protect the fair treatment of HIV and AIDS patients, and sponsored educational and awareness initiatives.

We hope the Los Angeles Times will set the record straight with your readers.
-- Paul Thornton and Jon Healey