Bill Puts People Before Profits
Tuesday, March 9 2010
Senate passes bill to protect health care consumers
DENVER—"I am disappointed that the GOP would side big insurance instead of standing up for Colorado individual and business consumers of insurance”, said Senator Morgan Carroll (D-Aurora).
Today, Senator Morgan Carroll and Senate Democrats stood up for Colorado consumers and passed Senate Bill 76. The bill prohibits insurance companies from giving claims adjusters any financial incentive or bonus to deny or delay a claim or medical care. Senate Bill 76 stops financial incentives designed to induce unreasonable denials, delays, cancellations or rescissions and allows salaries, company benefits, stock options, bonuses or financial incentives for other reasons. If Colorado signed SB 76 into law, it will join 16 other states in passing legislation to prohibit this action.
Sen. Carroll continued, “This bill protects consumers from abuse, and prohibits insurance companies from putting profits before customer’s health by using financial incentives to reward wrongful denials.”
Senate Republicans refused to support the bill and all voted no. They claimed the bill is unnecessary and, despite clear evidence to the contrary, claim no evidence exists to demonstrate insurance companies engage in these practices. A list of documented examples is provided below.
“Providing quality medical to customers should be the number one priority of our health insurance system,” said Sen. Carroll. “Instead, in too many cases, we see examples of companies trying to pad their profits while their customers go without needed medical care. We need to protect Colorado consumers and being some justice to the system.”
SB 76 passed on 3rd reading and will now be heard by the House.
DOCUMENTED EXAMPLES: IMPROPER BONUSES & FINANCIAL INCENTIVES TO DELAY, DENY, RESCIND, CANCEL
• Farmers whistleblower Insurance Claims Supervisor Robert Dietz came out acknowledging software designed to deny 20%+ of claims and payment of bonuses to deny claims. In a memorandum dated September 17, 2001, Farmers Insurance explained that “employees whose locations achieve their Quest for Gold goals, will receive 1.25% of their eligible salaries ($100,000 maximum).”
http://www.youtube.com/watch?v=A4roo153q9I&feature=player_embedded
• UNUM exposed in 1996 for over $18 million paid in bonuses to deny long term disability and other claims.
http://www.cbsnews.com/stories/2002/11/15/60minutes/main529601.shtml
• American Family exposed in claims culture to play games, laugh and tell jokes with denials with their now famous flying pig signifying we'll pay claims when pigs fly.
http://www.thedenverchannel.com/news/7011681/detail.html
• There is currently litigation across the United States against Farmers, State Farm, and Allstate over these types of programs. Policyholders have sued both Farmers and State Farm claiming that these programs are and were designed to force insurance adjusters to deny or delay claims. In return for denial or delaying of claims, the insurance adjusters received bonuses. http://www.badfaithinsurance.org/
• CIGNA bonuses to rescind policies of sick people. Such a cancellation led to the high profile death of a teenage girl who lost the opportunity for the liver transplant she needed to save her life.
http://www.sdnn.com/sandiego/2009-09-14/news/why-insurance-companies-are-denying-health-care
• BLUE CROSS was admonished in federal Congressional hearings by Republicans and Democrats for rewarding employees who dropped coverage for policyholders when they became sick. The panel found Blue Cross cancelled coverage of more than 20,000 avoiding more than $300 million in medical claims over 5 years.
http://articles.latimes.com/2009/jun/17/business/fi-rescind17
• PINNACOL ASSURANCE, (Colorado's quasi-governmental workers comp carrier of last resort, operated by CEO Ken Ross with a full corporate insurance culture) provides bonuses and financial incentives that reward the delay or denial of claims and medical care for injured workers in at least 4 ways, according to documents made public in this summer's interim committee on Pinnacol Assurance.
http://www.colorado.gov/cs/Satellite?c=Page&cid=1242822336368&pagename=CGA-LegislativeCouncil%2FCLCLayout
WRONGFUL DENIALS RECENTLY IN THE NEWS
• TIME INSURANCE / ASSURANT HEALTH recently had a verdict in Boulder County for dropping a woman's health insurance coverage after she was in an automobile accident.
http://www.dailycamera.com/news/ci_14302892.
http://www.westword.com/2010-02-11/news/health-care-hell-the-insurance-company-didn-t-give-a-damn-the-jury-decided-it-ought-to-give-37-million/
This is an illegal bad faith practice in virtually every state in common law, including Colorado. But 16 other states clearly codify the prohibition against this practice as a bad faith conflict of interest.
