Unfortunately, the Blue Cross outrages are multiplying like a California wildfire. Blue Cross is on a coverage pulling spree.

They are not in business to protect you when you become ill. They are in business to provide profits to Wall Street and a revenue stream to shareholders.

Here's what the Los Angeles Times reported a few days ago about the newest wave of assaults.

When Steve and Leslie Shaeffer's daughter, Selah, was diagnosed at age 4 with a potentially fatal tumor in her jaw, they figured their health insurance would cover the bulk of her treatment costs.

Instead, almost two years later, the Murrieta, Calif., couple face more than $60,000 in medical bills and fear the loss of their dream home. They struggle to stave off creditors as they try to figure out how Selah can keep seeing the physician they credit with saving her life.

. . .Shortly after Selah's medical bills hit $20,000, Blue Cross stopped covering them and eventually canceled her coverage retroactively, refusing to pay for treatment, including surgery the insurer had authorized in advance.

The company accused the Shaeffers of failing to disclose in their coverage application an undiagnosed bump on Selah's chin and physician visits for croup. Had that been disclosed, the company said in a letter, it would not have insured Selah.

Shortly after Selah's medical bills hit $20,000, Blue Cross stopped covering them and eventually canceled her coverage retroactively, refusing to pay for treatment, including surgery the insurer had authorized in advance.

The company accused the Shaeffers of failing to disclose in their coverage application an undiagnosed bump on Selah's chin and physician visits for croup. Had that been disclosed, the company said in a letter, it would not have insured Selah.

Thank God that good, yes, there are decent public-minded lawyers, who are stepping in to sue Blue Cross into submission.

Cancellations such as Selah's are fueling a new backlash against health plans. In a series of recent lawsuits, policyholders say they were illegally terminated, causing substantial financial hardship and jeopardizing their healthcare. State regulators are investigating and said they were preparing to take action against Blue Cross.

The people being cancelled hold individual plans.

Last week the Commonwealth Fund reported that an alarming 89% of our fellow citizens who attempt to secure individual insurance are unable to obtain coverage either because of the prohibitive cost or due to the notorious pre-existing medical condition.

The suits accuse health plans of dumping sick policyholders without evidence that the consumers intentionally omitted information about their medical condition or history. They also accuse insurers of using applications that are vague and confusing by design, trapping consumers into making mistakes that can be used to cancel their coverage later.

The complaints involve individual policies -- the type of coverage sold to people who work for themselves or for employers who don't offer health benefits. Unlike many work-based plans, which are open to qualified employees regardless of health, insurers in California and many other states can reject applicants for individual policies based on their conditions or health histories. After an applicant is accepted, a state law prohibits health plans from canceling unless the policyholder lied to obtain coverage.

Aside from appealing to the company that dumped them, subscribers' only recourse is to complain to state regulators or sue. After an insurer yanks coverage, it can be difficult, if not impossible, to get a policy from another carrier.

More than 2 million California residents buy their own health policies, which some see as an increasingly important form of coverage because many employers have dropped the benefit as costs have gone up. Insurers, in a push for healthier and wealthier subscribers, view individual policies as a growth opportunity.

I read these stories and say, there but for the grace of God go I. I am self-employed. I had individual insurance that was pulled. I'm one of the lucky ones, I was able to secure new insurance--but it wasn't easy!

What this is all about is outrage heaped on outrage, heaped on outrage. Sounds very familiar to most of us, doesn't it? Pay your premiums, file a claim, then get cancelled.

The way Steve and Leslie Shaeffer saw it, their $498 monthly premium was the price of peace of mind. The self-employed tile installer and stay-at-home mother wanted to make sure that they and their two children got whatever care they needed and that the bills would never bury them.

Two years ago, they bought a family health policy from a Blue Cross affiliate, BC Life & Health. Only a couple of months later, Selah's diagnosis -- aggressive fibromatosis, an extremely rare and fast-growing tumor -- put that policy to the test.

Initially, Blue Cross paid for her care. But when the bills surpassed $20,000, it stopped. Then, after collecting the Shaeffers' premiums for most of a year, Blue Cross canceled Selah, saying her parents left key information out of their application for coverage.
The Shaeffers say that's not so. When Leslie filled out the application, the couple said, Selah was a healthy girl who hadn't seen a doctor in months. After submitting the document, Leslie said, she noticed a bump on Selah's chin, but doctors told her they didn't think it was serious.

If you file a claim, you run the risk of being investigated then cancelled. This makes perfect sense. Blue Cross needs to maintain a low, Wall Street friendly medical-loss ratio.

The name of the game for the for-profit insurance industry, is Wall Street and low medical-loss ratios. The more revenue they spend on your health, the higher the medical-loss ratio.

Health plans say such cancellations are necessary to guard against people lying on applications. The companies rely on the information contained in that document to determine who gets coverage and at what price.

"The reason there is a rescission policy is to prevent fraud," said Chris Ohman, chief executive of the California Assn. of Health Plans.

But according to the depositions of Blue Cross and Blue Shield employees, fraud has little to do with it.

A review of depositions and company documents produced for the lawsuits shows that the health plans routinely scrutinize medical records, back 10 years or more, when subscribers submit claims for certain conditions within two years of signing up for coverage.

If the health plans find information in the records that was absent from the application, they cancel, often without finding out whether the discrepancy was an intentional lie or an honest mistake, according to the depositions.

Some consumer lawyers say that violates state law, which forbids companies from canceling coverage unless a policyholder was intentionally misleading.

Here's the money quote.

Consumer advocates said the practice makes a mockery of the purpose of health coverage.

"You think you have insurance, and then, after you get the treatment, you find out you really don't have insurance after all," said Claremont lawyer William Shernoff, who represents former policyholders in several lawsuits against Blue Cross and Blue Shield.

. . .Irvine lawyer Robert Scott, who represents the Shaeffers and several others in suits against Blue Cross and Blue Shield, said the current practice was a misguided effort to hold down costs.

"It's all about the money," he said.

To make matters worse, Mr. Bush, the insurance industry and its lobbyists, are engaged is a skillful manipulation of the facts. Their goal is to convince the American people that the reason health care costs are skyrocketing is because of those damn "trial lawyers" and the frivolous lawsuits they file.

More lies and deceit from the same folks who brought us Medicare D.