Here is the truth about our broken mess of an insurance system and the broken mess of law that feeds it, and a suggested approach to the problem.
Here is the truth about our broken mess of an insurance system and the broken mess of law that feeds it, and a suggested approach to the problem.
As most of us know (bear with me as we get to the law below), appealing a decision by an insurance company is basically a prayer and an appeal to human decency. You might get lucky and get an examiner who stands up for the right thing (funny how liberals tend to speak out for people like that, instead of trying to justify cruelty with “principles” or scare tactics). Sometimes, just sometimes you may get lucky; there is nothing in the law to protect you if you aren’t.
Insurance companies are very wary of setting "bad precedents." Their whole compensation/incentive structure is designed to deny deny deny to maximize profits by paying fewer claims. In a way, you can't blame them for putting profits above human decency. Our capitalist system directs companies to maximize profits and there are supposed to be other checks to prevent reprehensible behavior like government regulation or citizen lawsuits to check bad behavior. Unfortunately, in the case of health care insurance these checks have evaporated or were never put in place. That is why the insurance companies are able to make so many self-interested decisions that kill people.
The insurance law which applies to individuals insured through their employer (i.e. the vast majority of insureds) and sets the standards for health insurance law, the Employee Retirement Income Security Act (ERISA), is written so loosely in favor of insurance companies that they can reserve the discretion to decide whatever they want. It is ironic that when ERISA was enacted back in 1974, although it was mainly directed to curb pension mischief it also was supposed to set minimum standards to protect employees who are insureds. Instead, ERISA now acts as an oppressively low ceiling on our rights.
In a ridiculous Catch 22, ERISA has been interpreted to permit insurance companies to reserve discretion in interpreting their own contract, or plan. The insurance company’s contract is called a "plan." There are basically no constraints on what insurers can put in their "plan." It is reviewed lightly at best by employers. Employees and ordinary citizens have no prayer of understanding the plan’s intentionally obscure legal mumbo jumbo describing the actual coverage they are buying, much more of negotiating the coverage terms. The government is basically MIA throughout this whole process.
Employers don’t even need to provide their employees with a copy of the plan. Instead under the law they must provide a “Summary Plan Description” or SPD. Although there is regulation concerning what a SPD is supposed to contain, the language of the SPD may or may not roughly outline some coverage areas and basically its primary purpose for insurance companies is to try to direct you to in-plan health care providers and to slip in a disclaimer that insurance companies can deny coverage in their discretion. The law gives employees the right, by the way, to ask their employers to provide a copy of the plan and you may wish to ask your employers for yours so you can see what you are actually buying (though the Fox Republican government probably won't help you if the employer retaliates against you for exercising your right).
For example, to give you a little detail that may be more than you care to learn -- feel free to skip this paragraph knowing you haven’t missed anything but details -- there is a longstanding legal rule of interpretation called contra proferentum, which means in the case where the contract language is unclear it is interpreted against (contra) the drafter. This rule is supposed to apply with greatest strength in the context of disputes like insurance disputes where one party is a relatively tiny/powerless individual with no chance to negotiate the contract against a giant corporation. As stated, ERISA, however, allows insurance companies to reserve discretion in their plan as to how to interpret the contract language. In addition, if an insurer forgets to reserve the ultimate discretion in their contract as to how to interpret it (insurers forget this sometimes as this power is so counter-intuitively overreaching), a court will make the insured go through a lengthy and very costly “discovery” process to give the insurance company a free shot at clearing up any contract ambiguity in the insurer’s favor through extrinsic evidence, which means evidence external to the contract. Think documents documents documents and lawyer arguments gone nuts. In the end, any judgment calls the insurance companies are permitted to make are thinly reviewed only to ensure that they were not completely arbitrary and capricious with no possible reasonable basis at all (good luck proving that). Insurance companies are notorious for their slimy discovery tactics so good luck in that process! And by the way no jury trial is available. So much for contra proferentum. And by the time your “recovery” arrives, if you are lucky enough to receive one, the insured victim may well be long dead.
Yes, courts will pile on the insured to make them engage in costly litigation which will take four or five years or more to resolve through appeals etc. Even in clear cut cases where the insured is right, often insurance companies won’t settle until right before trial so they can fill their coffers with interest on money that should have been yours from the get go. There is no penalty to deter the insurance companies from engaging in this or any other kind of evil tactic. If the insured wins, the ERISA law bars the insured from claiming pain and suffering. Only in rare cases where the plaintiff can actually prove bad faith is the plaintiff even entitled to recoup his or her extensive attorney's fees.
By the way, the deck is so stacked that if an accident victim is found to be entitled to insurance coverage for a medical condition arising out of an accident, and accident victim wins a negligence lawsuit as a result of the accident, the insurance company can suck up that money to recoup its coverage costs. Wal-Mart's health insurance plan has exercised this right against its employees, with the "logic" that doing so "saves" "its other participants" (not selfless Wal-Mart of course) premiums.
The Supreme Court ruled that State laws which attempt to give insureds the right to pain and suffering or any other rights beyond ERISA are invalid. This is yet another example of how our supposedly staunchly principled, pro-States’ rights Fox Republican politicians are not really for the principle of States rights at all (their slap down of Arnold’s attempt to improve the environment in California is another recent example of Fox Republican hypocrisy); in fact, the Fox Republican politicians are for giving States the rights to overrule federal laws and rulings (abortion) they don’t like and can’t overturn at the federal level and nothing else.
To sum up the truth you all should know by now and which I have experienced first hand, our whole health insurance system is a joke and reflects a massive sellout to insurance company lobbyists. That is why we have the situation that Michael Moore described in Sicko where the insureds aren't really. That is why insurance company executives are “compensated” with so many of our premiums in outrageous, totally unjustified salaries and our health care system is more than twice as costly as every other system in the world yet ranked only 38th. That is why disputing an insurance claim time warps the plaintiff back into an ancient Dickensian legal system.
These facts showing without a doubt how totally screwed our health insurance system is, are no brainers. Yet Murdoch and Fox run around blowing smoke for the Fox Republicans so nothing gets done while more and more people die (no doubt, Nixon would have survived had he had Murdoch on his side). John Grisham wasn’t kidding when he wrote the Rainmaker. It’s not cynical. It’s the truth.
By the way, I am not advocating killing all the corporations. That won’t work. We need inclusive reform. We need to work with the corporations. As we saw the last time Hillary tried to enact major health care reform, steamrollering them and excluding them from the reform process will leave us right back where we are for a long long time. Obama has it right when he said corporations should have a seat at the table in figuring out how to deal with this broken mess, and they should not be able to buy everyone else’s seat and the whole table. We need a leader who can unify and speak across the aisle to all constituencies. Reform by a divisive leader will fail again.
Full disclosure: other than campaign donations, I have no affiliation with Obama or his campaign. I just want a leader who has the best shot of stopping all the outrageous, needless suffering of Americans. That is all.