Universal health coverage or bureaucratic shift

Attorney General Martha Coakley of MA has reached a settlement with Pan American Life Insurance Company alleging that the Louisiana based company "unfairly advertised, marketed and sold unapproved health insurance products in Massachusetts that did not cover mandated health benefits and services in the weeks leading up to the December 31, 2007 deadline for residents to obtain health insurance."

If you go to the Attorney General's page, you can read how Pan American is paying back about $100,000 in premiums to consumers, the actual amount consumers paid in premiums less the amount of any claims paid.

The state does better, it gets about $90,000 from the company.

The company was not licensed to do business in MA...should have been a slam dunk, so why the settlement?

For all those who believe that the demise of medicare, that privatization, and that some knee jerk commitment to Adam Smith is at work here, is there a chance that you're noticing that governmental involvement in the health insurance industry is not negotiable? Our choice is simple, government gets involved at the outset a la Medicare or government by way of attorneys general and courts get involved later.

Instead of ridiculous arguments about "capitalism" and competition (ridiculous because there is NEVER going to be complete government abstinence from involvement in the industry), consumers need to know how they are protected from the maneuvering of companies and governments looking out for the bottom line, their own.

Take the Massachusetts citizens who bought health plans from Pan American. Each of them is getting their premiums paid out less the reimbursements they each received for claims. This is the consequence for a company that illegally sold policies to citizens who are forced to purchase policies who then had to suffer with a company that didn't pay on their claims?

Now look at the process. You've Adam Smithed yourself into your best deal with Pan American, you're paying premiums, you make claims and they are unpaid. You notify the government. What? So much for capitalism. And if you think government inefficiency affected you before, now you're without health insurance AND you are waiting for those governmental wheels of justice to get you back your premium dollars. The order was announced this week, the cases arose in the fourth quarter of 2007.

The State of MA got itself some heavy settlement dollars, almost 90 grand. And the chumps who tried to do everything right, who sought out and made their best deal for health insurance and paid their premiums? Well, eventually, in terms of dollars they're being told they'll break even.

So what is bureaucratic shift? It means that consumers are being distracted from the core issue which is the inadequacy of our current health insurance products to cover needed medical care with health insurance company financial assistance that consumers pay for through their premium dollars. These are contracts. Strict liability for failure to provide consumers with the benefits of their deal is the only way that health insurance companies will begin to focus on honoring their contracts rather than paying to avoid liability under their contracts.

Government involvement AFTER THE FACT does not change the day to day stress and impact on health that occurs to consumers battling for reimbursements, coverage and assistance in paying for needed medical care according to the terms of their contracts. Government mandates ahead of time, requiring contractual compliance and providing for steep punitive damages in the event of non-payment, stalling, or using other health insurance loopholes to avoid contractual responsibility is the only way to protect consumers.

Pan American Life Insurance took a shot and when all is said and done, for under $200,000 they tried to conduct business in a place that they were UNLICENSED AND they bilked those who took out their contracts by failing to live up to their agreements.

While critics of universal health will say see it's not working, an honest assessment will actually note that it is the NON-governmental part of the health insurance business that is responsible for failure. It is the PROFIT motivation that has made the health insurance industry one where buyers must beware.

So what are the lessons learned from Massachusetts, assuming that our phony Adam Smith capitalists (because government is and will be involved in the insurance industry)will actually deepen their thought processes to reality? Theoretically the market should vote with its dollars and its feet and Pan American, that defrauding company should be out of business...yeah right. Okay, so what now?

First, there should be a media blitz, publicizing the fraud against consumers. While Pan American wasn't licensed in MA, it is licensed elsewhere and if you think it is simply NOT paying claims to MA residents, I've got a bridge to sell you in Brooklyn.
Such a media blitz should also publicize the agents involved, get their faces out there.

Second, punitive damages should have been provided to every consumer who was a victim of the Pan American scam. Usually punitive damages are tough because you have to prove the intent to do something unlawful but how blatant does that have to be? The company was operating in MA without being licensed to do so!

Third, understand the bureaucratic shift. Instead of government involvement in the administration and oversight of health insurance programs, we now have the government stepping in after the fact and saying, I can't believe you did that. We'd be better off fixing our current system because, in the language of health insurance, it's all about PREVENTION, everyone knows it costs more once there is an occurrence.

Fourth, consumers should protest against settlements such as the one with Pan American. I am pretty sure that this settlement was reached because the attorney general did not want this event to go on and on. However, this decision is a joke, a company that was not licensed to do business in MA cannot do business in MA, and it had to pay a whopping less than 200 grand.