California Insurance Commissioner Steve Poizner is slapping California Blue Shield on the back of their hand with a $12.6 million fine. Surely, this figure would not even rustle the feathers of many tech start ups, but when the 2004 average health care expense per capita in California was $4,638, this fine may cover the annual health care bill of about 2,700 persons.
Recall in Sicko when this insured lady had gone through medical treatment, and a few weeks later her health insurance company retro actively cancelled her insurance coverage. She was left with thousands of dollars in medical bills, which she thought she only had to pay a reasonable co-insurance or copay for. Her insurance company yanked her coverage because of lack of full medical history disclosure. Of a yeast infection, specifically. It was completely unrelated to her medical treatment. Who knew a treatable and fairly common infection could pull a startling surprise and pummel another American into deeper and insurmountable financial debt.
Health insurance companies claim that by leaving out any miniscule detail of one’s medical history is a path to coverage fraud. Surely, medical history disclosure at the time of application is the common commercial insurance practice to keep away people already known to seek expensive treatments. The incentive to make profit off of premiums is to not pay out claim expenses. Insurance companies rely on the applicant to list all previously diagnosed illnesses, common, severe, and even cured from. Then the company begins cherry-picking their applicants only to admit the healthiest applicants.
(You know you are guilty of cherry picking too. You pick the shiniest, reddest, and plumpest cherry. Oh this rule applies to lemons and apples too. Your entire grocery trip in fact.)
With all the administrative hoops to prove one’s identity in order to get indecipherable medical records in person, people often rely on their fallible memories to collect an entire medical history to apply for insurance. Most people do not have the intention of bilking insurance companies of coverage fraud.
How often will a woman recall her yeast infection from her wild, sexy, and roaring twenties? Yeast infections are so common that self-diagnosis and over-the-counter medicine will prevent mars on perfect medical histories.
The incentives appear to reward the healthiest, the sickest that never seek professional diagnosis and treatment, or the smart evasive ones that get cures from over-the-counter drugs or from a doctor friend with a loose prescription pad. Truly sick, indeed.
In case you are curious of the 2004 per capita health care expense ranked by State:
United States—–$ 5,283
1 Utah—–$ 3,972
2 Arizona—–$ 4,103
3 Idaho—–$ 4,444
4 New Mexico—–$ 4,471
5 Nevada—–$ 4,569
6 Georgia—–$ 4,600
7 Texas—–$ 4,601
8 California—–$ 4,638
9 Colorado—–$ 4,717
10 Virginia—–$ 4,822
11 Arkansas—–$ 4,863
12 Oregon—–$ 4,880
13 Oklahoma—–$ 4,917
14 Hawaii—–$ 4,941
15 Louisiana—–$ 5,040
16 Michigan—–$ 5,058
17 Mississippi—–$ 5,059
18 Montana—–$ 5,080
19 Washington—–$ 5,092
20 South Carolina—–$ 5,114
21 Alabama—–$ 5,135
22 North Carolina—–$ 5,191
23 Wyoming—–$ 5,265
24 Illinois—–$ 5,293
25 Indiana—–$ 5,295
26 South Dakota—–$ 5,327
27 Iowa—–$ 5,380
28 Kansas—–$ 5,382
29 New Hampshire $5,432
30 Missouri—–$ 5,444
31 Tennessee—–$ 5,464
32 Kentucky—–$ 5,473
33 Florida—–$ 5,483
34 Maryland—–$ 5,590
35 Nebraska—–$ 5,599
36 Wisconsin—–$ 5,670
37 Ohio—–$ 5,725
38 Minnesota—–$ 5,795
39 New Jersey—–$ 5,807
40 North Dakota—–$ 5,808
41 Pennsylvania—–$ 5,933
42 West Virginia—–$ 5,954
43 Vermont—–$ 6,069
44 Rhode Island—–$ 6,193
45 Delaware—–$ 6,306
46 Connecticut—–$ 6,344
47 Alaska—–$ 6,450
48 New York—–$ 6,535
49 Maine—–$ 6,540
50 Massachusetts—–$ 6,683
51 District of Columbia—–$8,295
