New Rule: Back Up Your Health-Insurance Horror Story

Health insurers are covered by HIPAA, the Health Insurance Portability & Accountability Act, and cannot discuss policyholders’ cases. Policyholders who allege insurers’ bad faith, on the other hand, are free to make claims that emotionally sway the public, but leave those of us acquainted with health-insurance regulations utterly baffled.

Take, for example, the famous fat baby of Colorado, a 4-month old who was reportedly denied health insurance because he is in the 99th percentile, weight-wise, of babies that age. The boy’s family, whose premiums went up 40 percent after the baby was born (itself a mysterious event, because every other family with the same policy would have had the same rate increase, under HIPAA), searched for another policy.

The non-profit insurer which denied the baby’s application, Rocky Mountain Health Plan, later changed its mind and issued a press release explaining its reversal. To anyone who researches health policy, but doesn’t work inside the industry, it is mysterious. To wit: “The trend in health care has been for more and more families with small children to seek individual coverage for their children from health insurers. . . . Underwriting for this age group is a relatively new process.”

This is baffling: Why would a family with group coverage seek separate coverage for their baby? It makes no sense to me, and a responsible investigative journalist would figure this out, instead of just trumpeting another horror story about the cracks in the facade of health insurance.

(While you’re at it, you might also check the archives as far back as, say, last August, when President Obama went to Grand Junction, Colo., the home of Rocky Mountain Health Plans, to praise them for their high standard of care. Check out the CEO of Rocky Mountain Health Plans at the time, championing his “universal pre-natal care,” where “every woman in the community who is pregnant gets pre-natal care — period.” Got it? That’s “in the community,” not “in our health plan.” Another little factoid that contributes to the subsequent story just not adding up.)

But the chubby baby and his family are private citizens. An even more egregious example comes from U.S. Representative Jane Harman (D., Calif.) who wrote an op-ed in the Sacramento Bee, in which she asserted that her 27-year-old son was “dropped” by his health plan because of a torn eardrum.

Of course, this would also be illegal under federal and state law, unless her son had misrepresented his health status when he applied for individual health insurance. I e-mailed and telephoned Ms. Harman’s office to request that she make public the letter(s) from her son’s health plan, in which it “dropped” him. The lady who answered the telephone told me firmly that no such correspondence would be forthcoming, because it was a “private matter” between Ms. Harman and her son.

No, no, no! Ms. Harman, uninvited, chose to throw her son into the public debate on health reform. I think she is obliged to give us all the facts of the case. There are simply too many unsubstantiated health-insurance horror stories floating around there that make no sense, and cloud, rather than illuminate, the discussion.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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