Insurance Companies Targeting High Risk Patients for "Recission"

Reuters published an excellent and scary article this weekend about Anthem/Wellpoint routinely targeting those with newly diagnosed breast cancer for investigation and possible termination of their coverage. The article is replete with multiple case studies of women forced to pay out of pocket or delay care while they fought with Wellpoint.

Wellpoint suggests that its efforts to find 'cheating' and kick sick patients off its insurance plan is part of its responsibility to prevent fraud and lower the cost of health care.  There is some truth to this - if the sickest lie to gain voluntary insurance, it raises the cost for all.  The truth is, though, it's always less expensive to care for a healthy population than to care for a sick population.

In some ways, this is old news.  In 2008, Wellpoint paid California a fine of $10 million and agreed to resume coverage for almost 1800 it had kicked off the plan. (search for "cancellation" to find the story within this Wikipedia entry).

Health care reform will outlaw these practices, and the Reuters reporter suggests we need more vigorous regulatory enforcement.    I agree - but I don't think that goes far enough.  

We need
(1) Universal mandate - so that everyone chooses health insurance - not just those with illness. We can't make health care affordable if only those with adverse risk choose to be in the "pool."  Health reform has this, although many worry the mandate might be weak enough than many healthy people will continue to opt out.
(2) A community-wide reinsurance pool so that exceptionally expensive cases can't threaten the financial viability of a health insurance plan.  Katherine Swartz suggested an approach that would do this in 2003 (here's a link to an RWJ interview with her.)

Sick people are very expensive to care for, and that won't change.  Rather than just setting up regulations to make it more difficult for insurers to shirk their responsibility, we should make structural reforms to make it less profitable to discriminate against those who need insurance most.