California Cross with Blue Cross over Letter

Things really have not been too good for health insurance giant Blue Cross in recent times. After being fined $1 million by the State of California for pulling off insurance cover for a large number of its policyholders unfairly, the company now finds itself in the crosshairs of almost everyone in the state, from doctors and patient advocacy groups right up to California Governor Schwarzenegger and Hillary Clinton, Democrat presidential hopeful.

The anger of the people comes as a result of a letter that the insurance giant sent out to doctors last week. In the letter, Blue Cross had asked doctors to provide them information about patients who had pre-existing medical conditions, so the company could pull such patients off their roster.

Specifically, Blue Cross had, in the letter, asked doctors to ‘identify members who have failed to disclose medical conditions on their applications that may be considered pre-existing’. The letter went on to say the company reserved the right to annul the policy of a member to its effective date if it found out the member had failed to disclose material medical history.

This is what Anthony Wright, executive director of HealthAccess California, a health care advocacy group, had to say: “For a company that has gotten a real black eye over the issue of rescinding coverage over the past year - to actually be more aggressive rather than less is simply stunning.”

Criticism has come from all quarters. Dr. Dean Didech, the CMO of the San Jose Medical Group, said, “It certainly is not a position physicians want to be put in. It really is a problem between the doctor-patient relationship.”

Blue Cross responded with a statement on Tuesday, defending the letter. In the statement, the company said while it holds in high esteem the trust that members have in it and also is aware of the relationship that doctors and patient advocacy groups have with its members, it was also the responsibility of the company to ensure all its records are correct.

Wright went on to say things would not have come to such a point had the state legislature not hesitated in passing legislation earlier in the month that ensured health insurance companies could not refuse to cover a person on the basis of his medical history.

The Blue Cross letter had been directed at those people who bought insurance as individuals instead of in groups, mostly freelancers, independent consultants, unemployed people, retired people, people employed in small businesses that do not have the provision of health insurance for employees, and people starting businesses newly.

In California, employers account for the health insurance cover of approximately 19 million people. Public health insurance programs like Medicare and Medical account for the insurance cover of another 10 million people. The remaining two million are the ones who come under the categories mentioned above, the intended targets of Blue Cross’ letter.

The reactions to the letter are already pouring in. A group of about 35,000 doctors in California, who comprise the California Medical Association, has already approached the California’s Department of Managed Health Care, the department that looks after the insurance industry, to get Blue Cross to withdraw the letter and put an end to such ‘deeply disturbing, unlawful’ practices.

Governor Schwarzenegger had his bit to say about the whole thing as well. Addressing a meeting, he said ‘to rat out a patient, I think it is a terrible idea.’ Presidential candidate Hillary Clinton also addressed the issue on her campaign website, using it to talk about the health care plan she was talking about. She said the letter was a ‘deliberate effort to pressure physicians to betray the sacred trust they have with their patients.’