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What do we need health insurers for anyway?

MICHAEL HILTZIK

February 28, 2010|Michael Hiltzik

In that Wall Street conference call, Braly and her WellPoint management team observed that the company had lost 1.4 million subscribers, or 4%, during 2009. Much of that was because of layoffs by employers who offered WellPoint policies to their workers. That became a big problem for the insurer because of federal COBRA rules allowing laid-off workers to continue their group policies if they pay the full price themselves. Who does that? Only people with sickness in the family, which skewed WellPoint's medical spending higher.

As for the 39% California premium boost, the House subcommittee released e-mails in which WellPoint executives discussed how to moderate rate increases by creating "look-alike plans . . . with a benefit or two removed" so they would seem cheaper, like a cereal company dropping its prices by a few nickels but putting less cereal in the same size box. Is there any surprise that, in this era of intolerable premium increases, the average deductible on WellPoint's policies has risen by 20% over the last two years? (One WellPoint policy in California carries a family deductible totaling up to $40,000 -- that's not a misprint.)

Braly in her testimony assured the subcommittee that even with the latest California rate increases, "a 40-year-old woman in Los Angeles can obtain coverage with a $1,500 deductible for as low as $156 per month."

She didn't specify what kind of coverage. So let's check out what her company offers. Leaving aside whether that 40-year-old woman might have a preexisting condition that would drive up her premium or make her uninsurable -- anything from diabetes to a history of hay fever -- the insurer's California package with a $1,500 deductible requires the customer to pay up to 70% of the cost of "covered services," including routine mammograms and Pap tests, plus as much as $500 a day for hospital stays.

Maternity isn't covered at all, so our 40-year-old Angelena better have gotten her lifetime childbearing out of the way before picking up the phone to sign up.

"Our plans fit the way you live," the CoreGuard brochure says. What it really means is: You better fit the plan, or you're out of luck.

Shouldn't that have been on the agenda at the Washington summit?

Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at michael.hiltzik@latimes.com, read previous columns at www.latimes.com/hiltzik, and follow @latimeshiltzik on Twitter.

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