This week's cover story, "You're in Bad Hands," follows a Lafayette woman's four-year battle with her health insurance company after a devastating car accident left her seriously injured, saddled with hundreds of thousands in medical bills -- and a canceled policy because of Assurant Health's profit-minded approach to the controversial practice of "post-claim underwriting."
Jennifer Latham wound up with a $37 million verdict against Milwaukee-based Assurant, in part because jurors wanted to send a message about the way insurance companies rescind policies to save money, sometimes on the slightest pretext. But will such a big judgment have any effect on the stutter-step efforts in Congress to implement some version of health-care reform?
As Jonathan Cohn points out in a recent piece on the New Republic blog, the Latham case should draw attention well beyond Colorado. It's a textbook example of how insurance companies use rescission to build profits while running roughshod over their own customers.
In fact, many elements of the version of the Patient Protection and Affordable Care Act that the Senate passed in December were directed squarely at companies like Assurant. Under that bill, a company could not totally deny coverage because of a pre-existing condition; couldn't rescind coverage when a policyholder gets sick; and the appeals process, so furtive in Latham's case, would have to be transparent (and even involve an independent review).
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SHOW ME HOW
Critics of these sections of the bill argue, not unreasonably, that it went too far in trying to micromanage the industry -- everything from dictating how premium dollars are spent to the size of the font in a benefits summary. The current impasse over getting a bill through both houses of Congress (the PPACA, you might recall, passed 60-39, with an abstention, before the arrival of Senator Scott Brown) has the Dems lurching toward compromise, if anywhere.
But what's so terribly controversial about at least requiring proper notice of rescission and a rational and fair appeal process, preferably overseen by state regulators? If nothing else comes out of the noise around the Latham trial, that would be a significant step toward protecting consumers in the health-care shell game.
Latham attorney Marc Levy urged the jury to send a message loud enough "so that Milwaukee will hear you." No doubt $37 million was enough to get attention back at corporate headquarters. The real question is whether the message will be heard in Washington.