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How secret "health insurance" company blacklists deny you coverage

[Welcome Industry Radar readers! -- lambert]

The banality of evil, expressed in sales manuals:

Trying to buy health insurance on your own and have gallstones? You'll automatically be denied coverage. Rheumatoid arthritis? Automatic denial. Severe acne? Probably denied. Do you take metformin, a popular drug for diabetes? Denied. Use the anti-clotting drug Plavix or Seroquel, prescribed for anti-psychotic or sleep problems? Forget about it.

This confidential information on some insurers' practices is available on the Web -- if you know where to look.

growing numbers are looking for individual health insurance after losing their jobs. On top of that, small businesses, which make up the bulk of South Florida's economy, are frequently finding health policies too expensive and are dropping coverage, sending even more people shopping for insurance.

The problem is, material available on the Web shows that people who have specific illnesses or use certain drugs can't buy coverage.

''This is absolutely the standard way of doing business,'' said Santiago Leon, a health insurance broker in Miami. Being denied for preexisting conditions is well known, but when a person sees the usually confidential list of automatic denials for himself, ``that's a eureka moment. That shows you how harsh the system is.''

A 50-year-old Broward County man, with two long-standing medical conditions, saw the harshness for himself when surfing the Web trying to learn why insurers kept denying him coverage. He was shocked to find several insurers' instructions to sales personnel, usually called the Guide to Medical Underwriting and often marked ``confidential and proprietary.''

''I think it's atrocious what's going on,'' he said. ``Basically, they're taking only the healthy so they can get the fattest profits. If you really need insurance, then you can't get it.''

But this guy doesn't need health insurance; he needs health care!

The Miami Herald asked several major Florida insurers -- Aetna, Humana and Blue Cross Blue Shield of Florida -- for copies of their underwriting guides. All refused, saying they contained propriety information and were confidential.

Searching the Web, The Miami Herald found underwriting guidelines for Coventry Health Care, which owns Vista; Wellpoint; Assurant Health; and Blue Cross Blue Shield of Nebraska.

Among the health problems that the guides say should be rejected: diabetes, hepatitis C, multiple sclerosis, schizophrenia, quadriplegia, Parkinson's disease and AIDS/HIV.

Insurers have different criteria. Sleep apnea and fainting for no known cause are reasons for denial for the Nebraska plan, but not for other plans. Vista doesn't want to cover severe acne, but other guides seen don't mention it. Insurers often use measures of body mass index to reject those who are too heavy or too thin.

For cancer, the key is how patients have been doing in remission. Wellpoint, a national insurer, rejects applicants who have had breast or prostate cancer within the past five years. With other types of cancer, 10 years must have passed. Assurant Health, based in Milwaukee, rejects most patients whose cancer has not been in remission for at least eight years.

Other reasons for automatic denial by various companies: alcohol-related problems of people who have not been abstinent for at least six years, chronic bronchitis, severe migraines, and a cardiac pacemaker installed within the last two years.

Some insurers will automatically reject applicants who are using certain prescription drugs. Wellpoint denies anyone who within the past year has taken Abilify and Zyprexa for mental disorders as well as Neupogen, which is used to treat the side effects of chemotherapy. Vista lists the anticoagulant Warfarin and the pain medication Oxycontin. Both companies list insulin.

The medications, of course, are indications of specific health problems. To make sure that applicants are not lying, insurers hire a data-gathering service -- Medical Information Bureau, Milliman's Intelliscript or Ingenix Medpoint.

Intelliscript and Medpoint do computerized searches of a person's drug use, gleaned from pharmacy benefits managers and other databases. The two companies say they comply with privacy laws. ''Ingenix requires each Medpoint client to obtain the authorization of the individual applicant or insured person,'' said Ingenix spokeswoman Karin Olson.

Last year, the Federal Trade Commission accused both companies of violating the Fair Credit Reporting Act by not offering to provide consumers with information about them. The companies agreed to settlements in which they promised to let people see their personal information.

Some settlement.

Hey, but we're all in this together, right? Especially in a system that gives desperate people every incentive to lie. Gad.

NOTE Kudos to the Miami Herald for reporting!

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Ian Welsh's picture
Submitted by Ian Welsh on

but very interesting to see it spelled out like that, nonetheless.

bendjamin's picture
Submitted by bendjamin on

I am being denied total health and life insurance coverage because I have both psoriasis and high blood pressure. In the case of Kaiser, since they already have my medical records, they denied me because I had "too many doctor visits over the past year". The only reason I had an unusually high number of visits was because I had a psoriasis flare up and the dermatologist approved me to go in for light treatments twice a week for a few months and they counted each of those as a separate appointment! This is the first time I've had to deal with all of this because I've always had health coverage through work before.