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January 25, 2010 11:38 PM UTC
25 Comments
This is a great idea and it’s only the large amount of $$$ the insurance companies spend on lobbying that makes passage questionable.
I hope Sen. Carroll will also take up her bill that would restrict how much money pharmaceutical companies can spend on doing things like taking doctors and other medical professionals out to lunch and giving them gifts.
According the CBO report, that’s how much Big Pharma spends each year promoting their drugs.
That’s over 10% of their gross sales in this country. $12 billion goes to the doctors, and another nearly $5 billion is directed at us consumers via television and print ads.
The rest goes for conferences and other misc promotions.
$38 billion goes to R&D, leaving the leftover 70% of sales for G&A and profits.
Boggles the mind.
Small language can mean big things.
Good policy and good politics.
Why not spend time legislating against the actual bad faith practices which are the underlying problem here?
This feel good measure is just a distraction from the real issue.
…for insurance companies to deny or delay a claim in bad faith??
…from Section 10-3-1104 (as described below):
So, what telltale wants to happen has already happened.
I think it would qualify as “misspent time” to spend time “legislating against” something that has already been legislated against.
But obviously we do not have effective legislation here or we would not have this diary.
…existing prohibition on bad faith more effective. Isn’t that exactly what you claim to want?
I’m lost.
1. How many bad faith denials will this prevent? I guess zero.
2. Will this reduce the total compensation of the claims adjusters? I doubt it.
3. Will this increase health care coverage rates or lower insurance costs? Nope.
What are we accomplishing here besides shaking our fists at the mean corporations? Seriously — I do want to know the likely, realistic results this proposal will give us which makes the world a better place.
and the Dems will have some winnable issues. Good luck to Sen. Carroll.
Companies can manipulate bonuses in any number of ways. The only way I can see this coming to light is a whistleblower situation–and there aren’t too many people who are going to rat out their own bonus.
Why not go after things like pre-existing conditions or rescissions or sex-based premium ratings?
I can say though that bonuses for denials has happened in the recent past.
You are right though that insurance companies are getting better about puting down written policies. But bad faith legislation (we have a relatively good law) and a robust Division of Insurance (we have a relatively weak one) are the necessary to make the law work.
…is the DOI “relatively weak”? Understaffed for sure, but any regulatory agency is only as good as the powers the legislature gives them.
Bad faith legislation is certainly nice, but it being able to prove intent (and have it stand up on appeal) is a easier said than done. Most companies aren’t foolish enough to put up signs bragging about their practice of paying bonuses for non-payment of claims.
I’d love to see 10-3-1104 get some more bite, I’m just saying this doesn’t seem to have much in the way of teeth.
understaffed is a problem.
The DOI does some good research, has the consumers best interests in mind and the legislature has passed many laws in the last few years (Fair act) that have substantial bite if they are used agressively.
My personal favorite bit out of research out of the DOI
http://www.dora.state.co.us/in…
They are doing great research, but when 75% of health insurance complaints are confirmed clearly more needs to be done.
As to 10-3-1104 I’d love to beef it up. For those listening in 10-3-1104 regulates how you get business (deceptive advertising) and 10-3-1115 regulates how you pay (or don’t) your claims (bad faith denial).
I am for muscular insurance agencies and I do not mean to impugn the CO DOI, I just want a stronger one.
…for the DOI (aside from staffing) is the fairly constant turn-over in Commissioners the past 10 years or so–especially during the last administration–and the ever changing philosophies with regard to regulation and consumer protection each has brought.
Owens tended to use the office as a way to provide political favors–and more often than not, those in the position leaned to the pro-business side of the regulatory spectrum than the pro-consumer side.
IMHO, of course.
In principal, this is a good bill if it is presented the right way by its backers. Does anyone know if Senator Carroll has a former insurance adjuster who is wiling to testify at committee that this is in fact what is going on in the industry? There has to be one former employee out there who can blow the whistle. This is the type of issue where just parading out people who got bad deals in negotiation with their insurance companies won’t work. They need someone to testify to the practice from an insider’s perspective.
If Sen. Carroll can avoid a fiscal note and get this kind of testimony, she should be able to get this through. This type of reform is sensible. The base Democrats really like it, and insurance companies are hated enough that it doesn’t stir up rank-and-file Republicans the way other issues do.
I will never see eye-to-eye with Senator Carroll ideologically, but that said, she is one of my very favorite legislators.
principle not principal!
http://www.thedenverchannel.co…
Story about American Family.
I have heard many stories like this, though increasingly there is no written policy.
Someone should investigate whether CO Dept. of Revenue auditors are also paid or evaluated based on taxes assessed on their audits.
This has simmered with me for quite a while. I remember a conversation I had with a neighbor who was a CO DOR auditor. I asked her if she would tell a taxpayer she was auditing that they might be eligible for things like unclaimed Enterprise Zone credits. She said that was not her job and it would affect her employment evaluations. I replied that the state and tax preparers should all be working toward arriving at the proper tax owed.
All I have is this one anecdote. But, I’m curious if the DOR actually evaluates its auditors on how much tax revenue is generated by their audits.
I regularly cross swords with the cost control people. They have become noticeably tougher, forcing me within rules I could usually talk my way around. I would love to have the state legislature defang them.
I worry about universal health care. Our state legislature has some control over Aetna and Kaiser. They are powerless against Medicare rules or federal control of Medicaid funding. We need to put two Patty Schroeders in the Senate and keep them there for 20 years. Only then do we have a chance of not getting screwed.
it holds insurance companies accountable for a practice designed to shirk the responsibility they’ve contracted to bear. This is a problem rife throughout the insurance industry, structurally inherent to it. Here’s a relatively trivial example, but one which illustrated to me in a personal way the nature of the problem:
When we first moved to Denver, My wife and I stayed with friends in Lakewood. In the wee hours of the morning, while we were asleep inside, a drunk driver totaled my car legally parked in front of the house. It was an old car that ran well and was reliable, that had been worked on gratis by a mechanic friend. The drunk driver’s insurance company (State Farm) refused to offer more than $1100, for which sum I simply could not replace that car (you can’t buy a reliable used car for $1100).
No one would ever question the fact that a drunk driver who totals your parked car has a moral obligation to “make you whole” again, as lawyers say. That moral obligation, in this case, means that they have to replace, or give you the means to replace, whatever it is that they cost you.
Insurance companies accept money in return for undertaking that moral oligation. Yet, as for-profit businesses, they operate according to an amoral algorithm: What is the least we can get away with paying the person to whom we have this obligation? This is a serious disconnect, because it turns the moral obligation on its head: The motivation is to shirk it rather than fulfil it.
Obviously, there are far more serious examples of the problem with this disconnect than the loss of my old car. (The father of the 18 year old drunk driver, by the way, to his enormous credit, ponied up an extra $1000 in a very rare act of undertaking one’s moral responsibility despite having insurance that is supposed to do so). And the availability of courts to address them are too expensive in money, time, aggravation, and risk for most people to resort to under normal circumstances. Those that have to, especially in the context of denied health insurance claims, have been doubly wronged by first the denial, and then by the compounded and extreme disruption to their already extremely disrupted life of having to be the plaintiff in a law suit.
We need to refine our system of insurance, and of legal accountability, to remove from those least able to bear it the burden of holding insurance companies responsible. It’s our collective moral responsibility to do so.