Watch the video: Azusa Suzuki testifies, "I'm still alive!"
Kari Chisholm
I thought I would follow-up on yesterday's post by Sen. Chip Shields. I've obtained the video of the testimony by Rep. Brian Clem and his mother-in-law, Azusa Suzuki, on SB 719 - the bill that would put insurance companies under the auspices of the Unfair Trade Practices Act.
It's fifteen minutes, but I'd recommend watching it - a pretty gripping story.
Can you imagine? Your mother-in-law is in a car accident, injured with broken vertabrae, and the health insurance company says they won't cover the expenses - because she's already been dead for nine months? And then, when informed that she's very much alive - they refuse to correct their error? Unbelievable.
Said Mrs. Suzuki: "I would like the insurance company to know, seven years later, I am still alive!"
During the hearing on SB 719, Sen. Larry George (R-Sherwood) calls it an "outrageous situation" and asked whether Regence had ever understood its "moral obligation" to get it right.
Unfortunately, Clem told the committee, the answer is - these seven years later - no. They've never fixed it.
Some of the most interesting information comes near the end of Clem's comments. It seems that Friday night, the CEO of Regence asked to meet with Rep. Clem. As Sen. George noted, "that's probably because you're a representative."
Unbelievable.
We'll see how the votes on the legislation shake out, but it's good to see that the reactions have been about basic human dignity, not partisan or ideological nonsense.
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10:32 a.m.
Mar 18, '11
I really like Brian's approach and support for his mother-in-law. It was very moving on a personal level.
12:19 p.m.
Mar 18, '11
It's indefensible.
Watching the video at least explains what happened - the insurance company thought she was dead, and canceled the autopay. Therefore they didn't receive payments for the insurance for nine months, so it was an inactive policy.
As Rep. Clem explained well, the critical broken link was when insurance company failed by not sending a notice of cancellation before canceling the coverage (and subsequently for providing wrong information claiming they did so, and not resolving the situation, but rather pushing for Suzuki to get an attorney, which they wouldn't recover the costs of, and so forth).
Stunning true stories of governme- er, private corporation bureaucracy screwing it all up.
3:16 p.m.
Mar 18, '11
I'm glad it's not high definition. This way you can't see me clearly in the background. :)
Where this fell apart was an action by the insurance company, but then they blamed the policy holder.
Since they were in the wrong, they should have taken their lumps for it.
6:05 p.m.
Mar 18, '11
A couple questions to chew on:
Wouldn't it be more effective to address situations like Mrs. Suzuki's by requiring insurance companies to send notice of cancellation to people they think are dead?
Why does 719 apply to all insurance instead of just health? Is there a constituency other then lawyers demanding this?
Under the current regulatory regime DCBS is supposed to address problems like Mrs. Suzuki's. Why is that an inadequate remedy? If there is an issue with DCBS then why not fix DCBS?
Is anyone considering how this will interact with PPACA? Legal expenses will be treated as admin in the medical loss ratio calculation. If insurers decide to pay first rather then risk litigation, that just adds fuel to the fire of premium inflation. Don't we want to go the other way?
7:39 p.m.
Mar 18, '11
BJ - You seem to be very zealous in your defense of insurance companies. Is this in any way related to your day job?
As Senator George said, what has happened to Ms Suzuki is indefensible.
1:12 a.m.
Mar 19, '11
I work in the property/casualty insurance industry, but have no professional dealings with health insurance if that’s what you mean. As to why I comment on insurance issues, in a general sense I think insurance is a more interesting concept then it gets credit for. It offers collective solutions to problems too large for individuals to manage on their own, and it does so without either printing money or using coercion. Conservatives tend to dislike it because they don’t like any collective action that doesn’t involve bloodshed, and liberals tend to dislike it because… I’m not sure how to fill in that blank right now.
With respect to Regence’s treatment of Mrs. Suzuki, it is indefensible and changes should be made to prevent its recurrence. But there are all kinds of ways one can change the law, some more efficient than others. That's what I'm getting at with my questions above.
8:08 a.m.
Mar 19, '11
"liberals tend to dislike it because… I’m not sure how to fill in that blank right now."
Really? You're commenting on a post about someone who has been denied coverage because the insurance company says that she's dead and refuses to correct the problem, and you're "not sure" why liberals have problems with the way insurance companies operate?
The problem with insurance companies is that once they have your money, there is a disincentive to actually pay claims. This disincentive is stronger in the health insurance industry, because such a high percentage of customers have little to no choice in who their insurance company is, and even if there was choice, there is little to no information available about the quality of the services provided by the various companies.
9:37 a.m.
Mar 20, '11
Michael, there's an asymmetry in the relationship between the insurer and the individual that you're not seeing. A claim denial may significantly effect the finances of an individual, that doesn't mean it significantly effects the insurer. That's how they can afford to pay claims.
Consider gambling: Does the bookie care who wins the game, do track owners care which pony comes in first? No, they care that the odds are correct and there is no cheating.
It's similar with insurance, they're focus is pricing and paying claims in accordance with pricing assumptions.
1:15 p.m.
Mar 20, '11
BJ, denying one claim doesn't significantly affect the finances of the insurer. Having a policy of denying legitimate claims does affect the finances of the insurer.
There's an asymmetry in the relationship that you're not seeing--the insurer is the one with the power.
10:22 p.m.
Mar 23, '11
Bullpuckey! Foremost, many casualty insurers have a blanket policy of either a) pay nothing (Allstate comes to mind) or pay doodly-squat (Farmers comes to mind).
Second, and not completely related to your post, but a thorn in my side, is the issue of subrogation. One of the worst parts of my job is having to tell my clients they thought they bought insurance, but they actually bought a loan.
10:31 a.m.
Mar 19, '11
The survey data I have seen shows that there is a strongly held frustration with insurance companies across the political spectrum. People I have surveyed overwhelmingly agree that consumers need relief from this kind of shenanigans and we need more transparency and citizens input into rate increases by insurers. If you have ideas on ways to protect Oregon consumers, I'd love to hear them, but all I have seen you comment on here is a defense of the insurance industry.
9:16 a.m.
Mar 20, '11
Sal, at the risk of answering what was meant as a rhetorical question:
The most pressing immediate need is to educate people on how to manage their coverage. People need to know how their deductibles and co-pays work and how to check if a provider is in-network or find one who is. People need to know that even if they do everything perfectly there will still be screw-ups, so it is crucial to read and understand EOB’s. The sad reality is that the person most responsible for covering costs has the least knowledge of the process between the insurer and provider. People need to learn how to use the documentation, phone numbers, and web sites that they have to track down the reason for a coverage denial and seek an appropriate remedy.
With respect to rate reviews, I support and have stated support for more transparency. I’ve also stated skepticism about the benefits of that transparency, because inevitably what gets exposed is a big medical loss trend. Health care costs are rising, fast. That isn’t something you can make go away by pounding the table and saying insurers are evil.
So if you want to help consumers open up the rate review process, and then follow where it goes. Dig in to the medical trend, call more hospital CFO’s before the legislature, have Aaron Crane give his “big” lecture on how hospital pricing is calculated. Start reviewing the Certificate of Need process, is that new facility really worth a 10% rate increase to the public? Maybe there’s a better way to finance hospital construction then directly passing it on to patients.
In short, engage with medical providers and find a way to reduce the growth in their costs.
4:35 p.m.
Mar 20, '11
"The most pressing immediate need is to educate people on how to manage their coverage."
No, I'd say the most pressing need is for insurance companies to actually deliver the services that people pay them for, and for them to be held accountable when they don't do that, as in this case.
10:43 p.m.
Mar 19, '11
" liberals tend to dislike it because… I’m not sure how to fill in that blank right now."
Insurance, as a concept, is a very progressive thing. It's a system in which a lot of people make small payments and share risk.
It is in practice that insurance has a problem -- in that the corporate insurance firms are failing to fulfill their mission: to provide people with financial security in the face of personal disaster.
The health insurance companies have decided, for example, that the path to higher profits is to deny care - rather than keeping people healthy.
Personally, I don't think health insurance should be a for-profit venture. At its core, health insurance should be a progressive, communitarian endeavor. We should require health insurance companies to be nonprofits. (That wouldn't solve every problem, but would go a long, long way...)
6:16 p.m.
Mar 18, '11
I believe his bill is really about taking jurisdiction from the Department of Consumer and Business Services which houses the Insurance Division/Insurance Commissioner and giving it to the Attorney General's office.
I worked for the Insurance Commission for 16 years and their refusal to enforce rules already on the books is, in my not so humble opinion and based on my experience, egregious. I'm not sure it makes sense to make the change rather than get the Insurance regulators to do their damn job.
The AG's office is already understaffed. The Insurance Division is not General Funded meaning it is paid for by fees from insurance companies. Hence the inherent conflict in enforcing the law. The regulator is funded by the regulated.
If this bill increases funding for the AG to enforce the law I would support it but the funding is already there for the Insurance Commission to do it. And the rules are quite sufficient if actually enforced.
8:23 p.m.
Mar 18, '11
Question for the CEO of Regence: If they had information that Azusa Suzuki was dead, why did they continue to accept payment for her policy?
8:34 p.m.
Mar 18, '11
Oops. I shouldn't have posted before watching the whole thing.
Mea culpa.