Cherry Picking

Scott Svonkin left a job with benefits, then started looking for individual coverage to replace his group plan.

He knew he'd pay more without an employer picking up most of the tab. And he knew he'd have to fill out a medical questionnaire because, unlike job-based coverage, individual insurance in California is contingent on an applicant's health. But that didn't concern him because, he said, "I'm healthy as a horse, never smoked and have had no major surgery."

As it turned out, Svonkin was rejected by not just one but three of California's biggest health insurers, which cited his history of asthma, among other things.

Asthma alone is usually not a deal killer, unless there have been trips to the ER. Some asthma meds are quite expensive, topping $300/month, particularly if multiple meds are used. One thing that may have contributed to the carriers refusal to issue coverage is the fact that Scott's wife was pregnant at the time . . . a sure deal killer when it comes to individual coverage.

"Our goal is to extend affordable coverage to as many people as we can," said Cheryl Randolph, a spokeswoman for PacifiCare Health Systems Inc., a subsidiary of Minneapolis-based UnitedHealth Group Inc. "But because of the medical underwriting, we do not accept everybody."

Consumer advocates see the practice as cherry-picking — a legal form of discrimination that is no longer tolerated in schools, public accommodations or workplaces — and a way to guarantee profits.

Cherry picking or sound business practice? Depends on whose ox is being gored.

A 2004 industry survey found that health plans said they turned away about 12% of all applicants.

The 12% figure seems a bit high to me but the article does not offer any substantiation. The author further suggests:

1 in 5 people who applied for individual coverage was turned away or charged a higher premium because of preexisting conditions

That figure seems low. I would have suspected more than 20% are pegged for pre-ex conditions.

Frankly, some of these stories seem exaggerated. At the very least, I suspect pertinent details have been omitted. I have never heard of a client being denied for jock itch as alleged in the article. Sounds like someone has an agenda to their reporting . . .