Harold Pollock just covered a story that has been kicking around the media and the blogs for the last few days. In this story, an ASU grad student ran up medical bills well over his insurance cap.
Brad Flansbaum draws my attention via Twitter to a remarkable story reported by Lela Moore in the New York Times. Arizona State doctoral student Arijit Guha has a bad cancer and a bad insurance plan. He was covered under his $400/month ASU Aetna Student Health plan that included a $300,000 dollar caps. He’s hit that dollar cap through surgery that removed most of his colon, chemotherapy, and other costly and physically traumatic treatments.
As his denied claims reached $118,000, he took his case to Twitter, under the ironic moniker @Poop_Strong.
The student then took to social media and exchanges were made between him and many other people, including his insurer, Aetna. In the end, Aetna agreed to pick up his remaining bills. This, predictably, led to a lot of moralizing. People have lined up behind the student or the insurance company based upon their own ideology, but I think they are missing the larger point. Insurance companies have a very difficult time holding down costs.
In my own small area of the world, and if you read, you can find many similar stories. Just coincidentally, we had a similar event with Aetna in our area many years ago. They had decided to not cover some procedures in order to cut costs. This resulted in negative publicity in the local papers that people still remember more than ten years ago. It also meant that Aetna had significant loss of market share in our area. Their push to become a dominant player in our area ended.
Similar stories often hit the media. A celebrity, or an appealing child is denied coverage. Negative press coverage ensues. Frequently, the insurer folds. They almost have to fold because they cannot afford to lose much market share. Without a large enough share of the market, they are unable to negotiate for lower rates with providers. If they cannot negotiate lower fees, premiums rise and they lose even more business.
While I have had my disagreements with health insurance companies over the years, they are not evil. They are mostly decent people trying to do good work and make some money at it. They have a few rotten eggs among them just like the rest of us, but I have also seen them do exceptionally good and honorable things which will never reach the front pages of any newspaper. That said, I think they are trapped with this coverage issue. I suspect it was one reason why they did not vigorously oppose the ACA. If what is to be covered by one insurance company is the same for all other insurance companies, for the same level of insurance, it will immunize them from complaints about lack of coverage.