BlueCross BlueShield of Texas' blueprint for denying health policies.

How to fix health policy.
Feb. 10 2010 7:06 PM

How Insurers Reject You

BlueCross BlueShield of Texas' blueprint for denying health policies.

Click here for a guide to following the health care reform story online.

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It's difficult to appreciate the stakes in health care reform if you receive health insurance through your employer. About 59 percent of Americans do, and while they are paying more and more for fewer and fewer benefits, in the larger scheme of things they're the lucky ones. Although they could certainly use some help from Washington, Obamacare won't give them much.

The people who most urgently need Congress to pass health care reform belong to a different group. They're the 9 percent of Americans who purchase health care for themselves or their families in the so-called "nongroup market," which is where most of the horror stories you've heard about health insurance tend to occur. On second thought, that's not quite right. The people who most urgently need health reform are those who aspire to join the 9 percent, but can't, either because no nongroup insurer will take them or because any nongroup insurer that will take them has priced its policy sky-high to offset some medical risk or another. Neither wealthy enough to pay for nongroup insurance nor poor enough to qualify for Medicaid, these spurned customers end up among the 15 percent of Americans who receive no health insurance at all. Should you lose your job and fail to find another, expect to purchase nongroup insurance or, worse, not purchase it. Together, these two groups represent one-quarter of the population.

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A lot has been written about what health reform would do for this 25 percent. It would create a new marketplace (the "exchange") to sell private health insurance to people who aren't insured through their employer or the government. Insurance companies that sold through the exchange would not be allowed to reject customers based on pre-existing conditions, and their ability to charge different people different rates would be sharply reduced. Everyone would be required to have health insurance (to prevent customers from gaming the system by not purchasing insurance until they got sick), and to help make such purchases possible the government would offset some of the cost for most customers in the exchange.

How badly are these reforms needed? To find out, I read through a 2009 document that BlueCross BlueShield of Texas provided its agents to guide them about who may and may not purchase a policy, and on what terms. The underwriting guidelines are quite draconian, though not dramatically worse than others that have leaked out; similar documents are online for BlueCross BlueShield of Florida (2009), Health Net of California (2006), BlueShield of California (2006), BlueCross of California (2004), and Pacificare of California (2003). BlueCross BlueShield of Texas is of interest because it's the largest health insurer in the state and because Texas has the nation's highest percentage of people without health insurance (25 percent). Also, the document happened to get leaked to me. BCBSTX did not return my call asking for comment.

The first hurdle to clear concerns weight. BlueCross BlueShield of Texas isn't too strict on this score. At 5 feet 8 inches, I'm 15 to 20 pounds heavier than I really ought to be, but I still fit comfortably within BCBSTX's required range of 115-193 for anyone receiving a "preferred" (i.e., lower) rate. Let the scales tilt to 194, though, and I'd have to pay the "standard" (higher) rate. If, during the past year, I'd been over the 194-pound limit but, through exercise or diet or medication, managed to drop my weight to 193 or lower, my insurance agent would add to my weight half the amount I lost in calculating my eligibility. Keep the weight off for a year, though, and I'd be scored like everyone else.

The next hurdle is much higher. It's called (with a refreshing absence of euphemism) the Automatic Decline List, and it consists of 143 diseases, from Addison's Disease to periarteritis nodosa, that will immediately disqualify you for coverage. It's "not all inclusive," we are warned, but if a potential customer has any of these then the agent must show him the door. Hemophilia? Disqualified. Penile implant? Get lost, you sissy! Pregnant? Begone, slattern, until after your post-partum checkup. Organ transplant? Unless it was your cornea, we got nothing to talk about.

Nine years ago I was misdiagnosed, by an emergency-room doctor of dubious competence, as having suffered a transient ischemic attack, a sort of mini-stroke that, in one-third of all cases, presages a full-scale stroke "some time in the future," according to the National Institute of Neurological Disorders and Stroke. That prognosis struck me as a little vague, considering stroke is the third leading cause of death in the United States, but in the end it didn't matter. Further investigation (by me) determined that in fact I had accidentally popped three Ambiens. (Long story.) The emergency room didn't draw any blood, which would have identified the problem instantly. Instead it took me at my word (I don't remember this; I was stoned out of my gourd) that, no, I hadn't taken any drugs that day. Did the paperwork ever catch up with my after-the-fact gumshoeing? I'm not sure, but I hope it did, because if I lived in Texas and was in the market for nongroup health insurance, my purported TIA would instantly disqualify me from buying any from BCBSTX.

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