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article imageSenate report: Health insurers milk patients for billions

By Matthew Moran     Jun 24, 2009 in Health
A new report from the U.S. Senate Commerce Committee says health insurance companies have forced consumers to pay billions of dollars that the insurers should have covered.
The investigation, led by John D. Rockefeller, (D) West Virginia, was aimed at finding fault in the private insurance system in order to promoted the public alternative that would be offered if President Obama was able to implement his health care plan.
Health care specialists testified before Congress today saying insurance companies try to avoid responsibility, mislead consumers and sell policies that do not fit patients' needs.
"The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable -- publicly accountable -- health care option," said Wendell Potter, a former corporate officer at CIGNA, a major insurance company.
The report was released to the public shortly before President Obama began a nationally-televised town hall meeting with Charles Gibson of ABC News in an effort to promote his health care plan.
The report says health insurance companies deliberately make paperwork complicated, so it is not understandable.
Insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it" if they think they have been shortchanged, Potter told Congress, as reported by the Washington Post.
The industry group America's Health Insurance Companies says insurers are working hard to solve these problems.
"Insurers have proposed "overhauling the market rules and enacting new consumer protections so nobody is left out, simplifying health care choices for individuals and small businesses, and reforming the delivery system to improve the quality and affordability of health care coverage," said Robert Zirkelbach, a spokesman for AHIC.
The report finds the most fault for insurers coverage of "out-of-network" care. Generally, insurers allow consumers several options for health care providers, but allow consumers to go "out-of-network" for better care.
The report says the insurance companies have underpaid for the "out-of-network" care, which leaves the patients with the rest of the bill.
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