Alex Blaze

The insurance industry targets people living with HIV/AIDS

Filed By Alex Blaze | March 17, 2010 5:30 PM | comments

Filed in: Living
Tags: health care reform, HIV/AIDS, insurance, Jerome Mitchell, LGBT, medication, rescission

Back in September 2009 I posted about a young African American man (don't know his sexuality), Jerome Mitchell, who bought insurance on the individual market, thought everything was fine, and then was diagnosed a year later with HIV. His coverage was rescinded, he sued, he won $10 million. Great result for him, but extraordinarily rare.

Now court documents are being released, and it turns out that his insurer, Fortis, has a policy of trying to deny coverage to people diagnosed with HIV/AIDS. Insurance companies, for some strange reason I just can't seem to put my finger on, seem to love accepting premiums from people who don't need health care and then want to take away their policies the moment they get an expensive disease (and HIV qualifies).

Previously undisclosed records from Mitchell's case reveal that Fortis had a company policy of targeting policyholders with HIV. A computer program and algorithm targeted every policyholder recently diagnosed with HIV for an automatic fraud investigation, as the company searched for any pretext to revoke their policy. As was the case with Mitchell, their insurance policies often were canceled on erroneous information, the flimsiest of evidence, or for no good reason at all, according to the court documents and interviews with state and federal investigators.

People with HIV were targeted. Fortis was looking for a way to deny coverage to people with HIV, which means that they either find a government program to help them pay for medications, or they die.

They knew what they were doing would kill people, so they put on executioner hoods when they made rescission decisions:

"There was evidence that Fortis' general counsel insisted years ago that members of the rescission committee not record the identity of the persons present and involved in the process of making a decision to rescind a Fortis health insurance policy," Nettles wrote.

Elsewhere in his order, Nettles noted that there were no "minutes of actions, votes, or any business conducted during the rescission committee's meeting."

I know if that makes it better or worse, if they didn't ever what anyone to find out the evil they were engaged in or if they were just worried about getting caught.

And the CEO of Fortis/Assurant, last year during the House hearings on rescission, defended its actions:

Hamm insisted before the committee that rescission was a necessary tool for Assurant and other health insurance companies to hold the cost of premiums down for other policyholders. Hamm asserted that rescission was "one of many protections supporting the affordability and viability of individual health insurance in the United States under our present system."

He also suggested that those who had their policies rescinded by Assurant had attempted to intentionally mislead his company: "Unfortunately, there are times when we discover that an applicant did not provide complete or accurate medical information when we underwrote the risk," Hamm said.

In this case, Jerome Mitchell didn't make an error. A nurse incorrectly wrote the date on a paper submitted to the insurer, and that was enough for them to deny coverage. And not just deny coverage, but continuously deny it, no matter what Mitchell and his lawyer said, all throughout the trial, all the way until a jury said that they did wrong. The nurse's error didn't translate into an understandable error on the insurer's part; instead there was a concerted effort to deny coverage and the nurse's error was the excuse.

This isn't a mistake on their part, and they didn't have a valid reason to deny coverage. They saw that there was one person who bought insurance as an individual (meaning his coverage could be rescinded without worrying about losing a large company's account), saw that he would be paying less in premiums than they would be spending on his medication, and decided to cancel his account and break the promise they made to him.

Mitchell, who lives in South Carolina, whose house just voted to end ADAP funding, would have gone on a waiting list for federal Ryan White CARE Act money to get the medicine he needed. After that it would be luck for him - he may have died before his time on the waiting list was up, as others did in South Carolina, or he would have ended up getting his medication covered partly by the federal government. And the rest of us would have ended up paying for his medication, later in the game than he needed, all the same. Perhaps Fortis/Assurant's customers get lower premiums with this policy (although most of this money is probably just going to executive compensation and shareholders), but they end up paying for it in taxes since we aren't so barbaric as to let everyone without insurance just die.

This is a big part of why creating a single payer health care system wouldn't cost more than what America's paying now for health care. Insurers try to hang the unprofitable cases (i.e., anyone who is better off buying insurance than not) on the government when it can, or just letting those people die. We're already paying for a lot of health care through the government, whether we want to or not. But instead of using the most efficient way of doing it - which is to get everyone on the same insurer who wouldn't deny them coverage - we're doing it through a complicated mess of players, each taking a cut of the money along the way.

Speaking of which, Fortis/Assurant made $150 million between 2003 and 2007, just through rescinding policies. They have to pay Jerome Mitchell $10 million. Unless they were swamped with lawsuits, they still won.


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I suspect this is just the most egregious case.

I was diagnosed with HIV just after starting a new job, and my insurance carrier demanded every medical record for the past several years, obviously trying to claim that the condition was pre-existing and thus deny coverage. Obtaining the records and proving that I seroconverted while covered by their insurance was incredibly difficult and time consuming, and if I didn't already work for a law firm I'm not sure I would have known how to do it, or anything about my rights. Mind you, even if the condition was pre-existing, ultimately they would have had to cover me on the office group plan, and I did not require any treatment at the time of conversion, so this whole exercise was just to save them the cost of the two or three doctor office visits I had at the time. Had these visits been for my usual reason--seasonal allergies--they would have been routinely approved.

People living with HIV are targeted every day. This case is just the tip of an iceberg full of villainous companies who do it more discreetly.

Spot on, Christian. As I recall, 'private' disability insurers tried the same thing in the 90's, but a lawsuit and congressional investigation (against Unum?)put a stop to a lot of this egregious corporate behavior. That said, the insurance industry (health, home, disability, et al) remains a greedy, cut-throat mafiosa that never fail to garner huge profits (while pleading poverty) in their zeal to drain America dry.
...Thanks, Alex, for an important and insightful piece.

Are we surprised? They're all dirty fuckers to start with. (Insurance companies, that is!)

Bill Perdue Bill Perdue | March 19, 2010 3:11 AM

We're not the only ones. Look for more and deeper cuts in private and government care for HIV-AIDS patients.

This is the same insurance industry that wrote the White House/Congressional health care scam.

This is the same insurance insurance industry that will continue to leech hundreds of billions from the national health care budget and pay it out as bonuses to an obscenely bloated capitalist management clique.

This is the same industry that's blocked socialized or single/payer medicine for decades by bribing and suborning elected officials? They own hundreds of politicians from Obama on down.

This is the same insurance industry that routinely denies treatment - i.e., murders - thousands a year and has never been prosecuted, even when they admit it publically? http://www.youtube.com/watch?v=DoqpPwvUoP0

Hildebrand, The Insurance Warden | March 19, 2010 4:14 PM

You wouldn't believe it, but those rotten insurance companies also target people who are terminally ill -- like, just because doctors have confirmed that a patient is going to die within the year, insurance companies will find a way to deny his application for health coverage.

Tongue-in-cheek discourse aside, I know that HIV sufferers are NOT terminally ill (well, some are). Nevertheless, they do have a less favourable prognosis than those who do not carry a lethal virus. Insurance is a business of numbers, and it comes up insolvent (that is, there isn't enough money to go around) if people who present more risk don't put in more money.

Sometimes simply charging an applicant more money for insurance isn't an option: maybe an insurance company isn't equipped to calculate the risk and the appropriate price for insurance. In such cases, the insurer has two options: refuse to accept an application or sell insurance policies they won't be able to honour down the road.

The behaviour which usually gets interpreted as "targeting" is in fact the failure to approve applications from individuals who present too much financial risk.

This was recently also brought to light in an editorial in the New York Times that Assurant has a policy of targeting HIV + individuals.
One more reason for insurance industry laws and reform.