The headline sounds ominous.

American Medical News More evidence for why health system reform happened: a House study found a rapidly rising rate of denials for individual coverage.
amednews: Coverage denials by 4 major insurers rise nearly 50% :: Oct. 25, 2010 … American Medical

Preexisting conditions were used to reject more than 651,000 applicants during a three-year period, says a House committee report.

Yeah, been there, done that. When I adopted my oldest son, he was at first denied insurance. But we appealed, with a second medical opinion, and he was added, with a waiver that if he developed problems in the next so many years, they wouldn’t pay for it.

Yet the timing seems a bit suspicious, and I had questions.

First question: Why does the “Facebook” link insist that this “is evidence why health reform happened”.

Sounds like the AMA related American Medical News is trying to justify the AMA’s support of a health care plan that most of it’s members don’t like.

The actual article’s title is more neutral:

Coverage denials by 4 major insurers rise nearly 50%

Second: Why the jump in turndowns in the last two years? Could it be because insurers were worried they would be stuck with pre existing conditions when government decided to take over health care, and therefore were being pickier about who they enroll?
Third: there are the claims about “denial of payment” in the article.

the House Committee on Energy and Commerce discovered that from 2007 through 2009, Aetna, Humana, UnitedHealth Group and WellPoint refused to pay 212,800 claims due to preexisting conditions.

Sounds like a lot of denials. But the numbers are lower when you see the numbers per year,

The refusals numbered about 67,200 claims in 2007, 74,650 in 2008 and 70,900 in 2009, the committee stated in its report, released Oct. 12 by Chair Henry Waxman (D, Calif.) and Rep. Bart Stupak (D, Mich.).

and of course, these numbers don’t clarify if there were several refusals on the same person, or if some of these refusals were reversed with appeal.

Three: What type of numbers are we talking about? How many folks are actually covered by the insurance companies?

In this (unrelated) 2006 article, it mentions that Aetna covers 27.9 million “unique” members. United Health Care group provides insurance for “75 million” people worldwide. Humana runs hospitals, so is a bit more tricky to figure out their numbers, but they are involved with Medicare advantage and other programs.

As of December 31, 2009, Humana Inc. had approximately 10.3 million members enrolled in medical benefit plans and approximately 7.2 million members enrolled in specialty products programs.

So if these three companies, who cover over 100 million people, have turned down 250 thousand this year, it does put it into a slightly different perspective.

And you have to remember, some of those turned down might have gotten insurance with a waiver, or found another company to insure them.

The main problem that I have personally run into is that when you change jobs or move, you have to change your coverage. So the new insurance won’t cover a problem that developed when someone else insured you.

So why not mandate that one can carry insurance from job to job?

I also had to pay for my own insurance. If you are independently insured (e.g. not in a group) the insurance cost is much higher.

Finally, the dirty little secret is that these companies are not there “to provide health care”, despite all their propaganda. They are out to make a profit by providing a service to you. And a quick google will show you that those who run the companies earn seven figure salaries, and that their stocks are humming along nicely, thank you.

Because big healthcare is not a monopoly, if you are unhappy, you do have the option to pay for health care yourself or go elsewhere.

If you are turned down, you do have the option to appeal the decision, find another company to cover you, or in the worse case scenerio, give all your possessions to the poor, quit your job, claim poverty, go on welfare and get Medicaid.

Yes, I am joking.

One reason I went government after quitting private practice is that I could not ethically join an HMO that limits care. I had been in working in a rural area where many of my patients were “undocumented aliens”, Medicare, or Medicaid, or who paid cash because of high deductibles on their insurance policies. It was financially untenable.

No I don’t have an answer to the mess (I favor single payment insurance, allowing those with preexisting diseases to “opt in” to Medicaid, the ability to take your coverage with you when you change jobs, and the option to chose out for your own private insurance). I don’t know if I support a bill which is so long and complicated that no one has read it, and every week we get another “guess what’s in the bill” headline.

In summary, this report is election week propaganda, and should be ignored.

If you weren’t worried about the ten percent unemployement rate (most of whom have probably lost their coverage) and about the 40 million who don’t have health insurance, then why should a report that 250,000 people were turned down (but who might have gotten insurance on appeal or by another company) isn’t going to convince folks that a 1600 page health care bill that no one had read was “necessary” or “urgent”.

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The number of applicants in the individual health insurance market who were denied insurance because of preexisting conditions increased 49% between 2007 and 2009, according to a House Energy and Commerce Committee study of records from four major insurers.

Denials

Source: “Coverage Denials for Pre-Existing Conditions in the Individual Health Insurance Market,” House Committee on Energy and Commerce memorandum, Oct. 12 (energycommerce.house.gov/Press_111/20101012/Memo.Pre-existing.Condition.Denials.Individual.Market.2010.10.12.pdf)

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Nancy Reyes is a retired physician living in the rural Philippines. She blogs at Hey Doc Xanga blog.

she has PhilHealth.

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