Wednesday, October 14, 2009

An evil insurance company?

A friend sent me a link to a Washington Times article, "Insurer ends health program rather than pay out big." The subject line of my friend's e-mail was "Evil insurance company." I disagree.

It's a sad story. Ian Pearl, 37-year-old brother of novelist Matthew Pearl, "has Type II spinal muscular atrophy - which often kills victims in infancy. He grew to adulthood only to suffer respiratory arrest at 19. He has required a tracheal tube ever since." His insurance company, Guardian Life, is "legally barred from discriminating against individuals who submit large claims. So "the New York-based insurer simply canceled lines of coverage altogether in entire states to avoid paying high-cost claims like Mr. Pearl's."

Mr. Pearl's care costs $1 million a year. Without it, he will probably die.

Why don't I think the insurance company is evil? Because a for-profit company has to watch its bottom line. It is responsible to its shareholders. It exists in order to make money. If it doesn't, it will fail; and if it fails, even more people will be uninsured.

What is evil is this: that we Americans allow our health-care system to be financed by industries that exist to make a profit. No other rich capitalist nation does this.

Many developed nations finance their health-care systems through private insurance companies. The difference is this: everywhere else, basic health insurance is required by law to be not-for-profit.

Our legislators are trying to reform health care without reforming the evil that is at the heart of our system. Until the profit motive is removed from basic health-care insurance, we will continue to read stories like Mr. Pearl's.


Anonymous said...

I entirely agree. No one should be allowed to profit from selling anything that is necessary for people to survive. Life not a commodity that should be bought and sold for profit. Doctors should not be getting rich off the misfortune of the sick. Medical care should be free, just like air. Medical school tuition, clinics, hospitals, heart surgery, medicines, and MRI's should all be free because our lives depend on them. People who save lives should do it because it is the moral thing to do, not for the sake of profit.
Tad Lehe

LaVonne Neff said...

I have a feeling, Tad, that your tongue is firmly planted in your cheek (though in some systems, what you advocate is close to what is being done). The problem isn't that people pay for services or that they are paid for rendering services, though. Not-for-profit institutions use money, and their employees take home paychecks. However, since they are not publicly held institutions whose purpose is making a profit, they can plow all of their revenues back into the services they exist to provide.

Jason said...

PBS did a Frontline special on other countries' healthcare reforms - including Switzerland, Japan, and the United Kingdom. It is very informative how those countries have moved away from "for profit" and into a fairer health care ethos. Some of these companies still make a profit - by offering larger plans on top of basic plans. It is very interesting and insightful and worth your time. In one country, medical school was free. Doctors made less money, but had no school loans and significantly lower malpractice insurance.

Thank you for this insightful blog. Keep up the good work.

Matthew Pearl said...

Ian is my brother. Thank you for including a link to the story. I'd like to explain, though, why the story is far more shocking than your post recognizes. This actually is unprecedented. Insurance companies are *not* allowed to identify an individual who is sick or disabled and drop him or her in order to increase their profit. That would be discrimination and illegal. So Guardian, instead, dropped the entire "plan design" for everyone who had it, doing an end-around the law. Not only that, our lawsuit uncovered documents--now public, now published in the article you link to--showing the executives planning a "hit list" of which individuals to target based on how much their health care costs. We're talking people with serious illnesses and diseases. They referred to my brother Ian and those like him as the "dogs" of the group they had to "get rid of" and "train wrecks." This was not the beginning. They had sent private investigators for years to try to find that my dad's business was not a real one, or some other basis of cancellation--which of course they didn't. They did this to the other "dogs," too: people who are paralyzed, have MS, cancer and other critical diseases. The truth? They thought Ian would die a long time ago. So did the doctors. So instead they pulled this. And in contrast to what you generously assume, they were still profiting in their small business division--big profits. At the time of this plan withdrawal, Guardian CEO Dennis J. Manning boasted that it had capital of $4.3 billion, net income of $437 million, and record shareholder dividends.

They're either an insurance company or they're not.

For those who want to help do something about this, please check the Facebook group I just started:

Thank you again, LaVonne, for sharing the story.