When 4-year-old Selah Shaeffer developed a cancerous tumor and needed extensive medical treatment, her health insurance coverage was cancelled and her mother and father ended up with a medical bill exceeding $60,000 and the prospect of losing their home. The mistreatment of the Shaeffer family, described in a Sept. 17 article of the Los Angeles Times, is only one of more than 70 cases in which Blue Cross of California, the state’s largest health insurance provider, illegally cancelled health insurance policies when policyholders depended on them the most.
In October, Blue Cross of California discreetly settled more than 70 lawsuits by patients whose insurance policies were illegally cancelled. The settlements were for undisclosed amounts that allowed the Shaeffer family and other victims to pay for the treatments. The plaintiffs claimed that they were dropped from their policies because Blue Cross claimed to have found discrepancies in the applications. The insurance giant, which denies any wrongdoing, was also recently fined $200,000 by the California Department of Managed Health Care for illegally canceling one particular patient’s coverage and was later sued again, in a separate lawsuit, by several hospitals for failing to pay for the care of patients.
CSUN provides a lot of business to Blue Cross of California. Through its partnership with insurance broker Acordia Somerton, an insurance agent specializing in insurance for college students, CSUN endorses Blue Cross as the main provider of student health insurance. The college administration needs to review its practice of doing business with this dubious corporation, which so blatantly disregards human life in favor of profit. Students should be presented a choice of an alternative insurance from a provider that is more ethical or, at least, does not systematically and illegally cancel insurance policies.
Such a policy is arguably hard to find. Most major health insurance providers in California have been sued in cases similar to those affecting Blue Cross and most operate on a for-profit basis, which means they actively avoid responsibility to pay up. To some extent, the problem is not simply with Blue Cross or any other for-profit health care provider, but with the overall lack of social responsibility among corporations within this capitalist society.
According to state law, fraud provides a legal basis for canceling coverage. All insurance companies review a policyholder’s application once a claim has been made. However, a practice that was business as usual for Blue Cross of California was ruled to be repeated violations of state laws in the court decisions.
The Blue Cross scandal especially pertains to CSUN’s international students, who are required to purchase a health insurance and handed the Acordia Somerton brochure during orientation. A majority of international students at CSUN buy their policy through Acordia Somerton, which offers only Blue Cross policies.
Although international students are not required to purchase their health insurance from Blue Cross, they need to show proof of insurance that meets specific minimum requirements. Consequently, out of convenience, the relatively low cost of the policy and the lack of presented choices, most international students choose to give their business to Blue Cross.
Amid mounting public criticism, Blue Cross has declared their intentions to reform their practices, but critics have dismissed those claims as being simply for show. The secret court settlements appear to be a way for the company to escape accountability and sweep the matter under the rug by paying off the plaintiffs with undisclosed settlements. The secret settlements benefit Blue Cross because the matter has received little public attention and there is little pressure on the company to reform its practices.
In an attempt to remake its tarnished image, Blue Cross of California hired Sitrick and Company, a successful PR firm specializing in crisis management for corporate wrongdoers including Halliburton and Exxon Mobile. Sitrick and Company focuses on the “difficult task of keeping clients out of the press,” according to the company Web site. In the case of Blue Cross, this focus means restricting media attention surrounding the lawsuits and avoiding the risk that the court rulings set legal precedent, which would require industry-wide reforms.
CSUN should send a clear message to Blue Cross to change its wrongful practices. Students should respond by canceling their health insurance policies and taking their business elsewhere. As policyholders and customers, students inevitably support Blue Cross and its unethical practices.
Students and the college should seriously reconsider their support for a company that cares more about profit than it does for its responsibilities as a healthcare insurance provider. In the end, if a CSUN student turns to Blue Cross expecting them to take care of a $200,000 medical bill acquired during a time of crisis spent in a hospital bed, he or she might experience the additional pain when they realize that their policy was also cancelled because of corporate greed.