I have had a number of interactions recently where insurance played a prominent role. These events left me pondering whether insurance in general has begun to make justice more elusive rather than further justice by compensating injured individuals and indemnifying losses. The best answer I can come up with is “yes and no”. That is, some companies (hopefully only the fringe) have crossed that line.
The most personal of these events has been my attempts to replace my health insurance with a plan coupled with a health savings account (which was promised to be the solution for many hard to insure folks). For a man just hitting his stride in life (my euphemism for middle-age), I am in quite good health. I work out, have never had or required surgery, don’t smoke, and have no significant health issues other than being a little robust-sized (my euphemism for “big boned”).
Despite this, I have been precluded from getting this new health insurance because my HDL (good cholesterol) was low in 1998 – eight whole years ago! My overall cholesterol was fine and the LDL (bad cholesterol) was in the healthy range. In retrospect, getting my cholesterol checked at all may have precluded me from being insurable on these HSA private plans now. It struck me in a very personal way how insurance companies attempt to only insure those persons or entities that don’t really need their coverage.
I can’t really argue with the logic. Their profits will be maximized by selling coverage where they will least likely have to pay out significant sums. To that end, elaborate applications and unfathomable contracts have come about that allow them to either weed out the naive and honest or refuse to pay claims on those that fibbed in the application process. Based on how much I have paid for health insurance in the past and how little they have had to pay for my health costs, I would say that I would be a good investment for them. But, they only use the past to predict the future and what risks might lurk there.
A more concerning event occurred during my stint at an insurance defense firm. One of the carriers of professional medical liability insurance had one of the partners drive the new associates three hours each way to have lunch with some of the claims representatives. It perplexed me as to why they would demand this day long (non-billable) trip before any of the new associates could handle their business. Did they only want pretty people doing their work? Was there some kind of secret blood oath involved?
The lunch was casual with very little actual business talk. It dawned on me later, though, that the one message each of the representatives echoed to whichever attorney sat near them was how their company would spare no expense in pursuing any possible defense to coverage. This insurer refused to ever settle regardless of how clear the negligence, causation and damages and they wanted to judge our reactions to this company line in person.
I hate to admit that I failed the test. I failed it because they approved me to work on their cases. I like to think that if I had realized up front what the meeting was about, and had time to figure out how to put my reaction into words, then I would have challenged this mindset even though it would have hastened my exit from the big firm world. I think an insurance company selling policies promising to cover the medical professional, who is liable for damages, but that has no intention of ever paying without a fight, is unconscionable.
I do understand insurers litigating cases where there are strong doubts about a breach of duty or causation. I think they have a duty to their shareholders to protect against paying such tenuous claims. But to refuse to pay up when those issues are only weakly debatable is a breach of contract. I don’t mean a breach of the convoluted legalese designed to give the carrier maximum loopholes and the insured or third parties minimum protection. I mean the basic contract of “We will cover you by paying the injured person when you slip up and you pay us thousands of dollars in premiums each year.”
In avoiding this voluntarily assumed contractual duty, the insurance carrier shifts their costs onto many other parties. The physician may not realize the cost to them of fighting out every claim until they have to give up a week of practice to prepare for and attend a trial. They may also be unaware of the potential for a judgment in excess of their coverage. The courts are burdened by the additional motions and trials. The major loser is the injured person whose life is held in limbo for years while the tactics on either side slow justice down to a crawl. The general, taxpaying public also pays because of the strain on the resources of the court but also because many injured persons must turn to Medicaid, SSDI and Medicare while waiting for the judgment.
I want to repeat that I am not talking about the cases of outright fraud or where there was just a bad result despite the medical professional doing everything they could. There are a number of suits brought because of bad results even in the absence of a breach of the standard of care. I am speaking of the cases where negligence and causation can reasonably be attributed to the care given and yet the insurers balk at compensating the injured person.
I am also not speaking of the insurance carriers that do an excellent job of evaluating claims and participate in negotiations in good faith. Without these insurers, the costs of injury and loss would usually remain on the injured party because there would be no other adequate source of compensation. These insurers will engage in the process of mediation which can approximate a just result quicker with less expense than a trial.
Anyway – to bring this tirade to a close. How can we reign in the extreme companies and make them more accountable? Do we need to nationalize insurance regulation? Are there alternatives to traditional insurance that can put market pressure on these companies? Some religious organizations are beginning to flourish that provide alternatives to medical insurance for members of their faith and I suspect the health insurance companies are taking note (see these articles http://ctlibrary.com/9928 and http://www.insurancejournal.com/news/southeast/2006/10/30/73618.htm). These groups include Medi-Share, Christian Brotherhood, Blessed Assurance, and Samaritan Ministries. There are likely others reflecting other religions. Perhaps there are other alternatives as well. Mostly though, I hope I (and everyone) can be more confident and quicker to challenge an extreme company line and encourage just resolutions.