This is a rational business decision, but also shows why we need health care reform. Reuters reports that WellPoint has been targeting women with breast cancer to cancel their policies:
Shortly after they were diagnosed with breast cancer, each of the women learned that her health insurance had been canceled. There was Yenny Hsu, who lived and worked in Los Angeles. And there was Patricia Reilling, a successful art gallery owner and interior designer from Louisville, Kentucky.
Neither of these women knew about the other. But besides their similar narratives, they had something else in common: Their health insurance carriers were subsidiaries of WellPoint, which has 33.7 million policyholders — more than any other health insurance company in the United States.
The women paid their premiums on time. Before they fell ill, neither had any problems with their insurance. Initially, they believed their policies had been canceled by mistake.
They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.
Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women’s specific cases without a signed waiver from them, citing privacy laws.
That tens of thousands of Americans lost their health insurance shortly after being diagnosed with life-threatening, expensive medical conditions has been well documented by law enforcement agencies, state regulators and a congressional committee. Insurance companies have used the practice, known as “rescission,” for years. And a congressional committee last year said WellPoint was one of the worst offenders.
But WellPoint also has specifically targeted women with breast cancer for aggressive investigation with the intent to cancel their policies, federal investigators told Reuters. The revelation is especially striking for a company whose CEO and president, Angela Braly, has earned plaudits for how her company improved the medical care and treatment of other policyholders with breast cancer.
Many things are handled best by the free market, but financing of health care is not one of them. The profit motive which does make the market work well in many situations gives the insurance industry incentives such as this to improve profits by finding ways to deny coverage. As this example shows, the consequences are too serious when insurance companies are motivated to drop the coverage of women because they have been diagnosed with breast cancer.