Monthly Archives: June 2009

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Insurers to Continue Practice of Rescissions

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Everyone who files for independent health insurance is required to fill out an application that lists all pre-existing medical conditions. But what if you fail to mention the fact that you have acne? Or a slightly enlarged blood vessel (which is so non-life-threatening that your doctor doesn’t even shutterstock_medical1mention it to you after a cat scan)?

Failure to mention these small, and seemingly unimportant, medical issues allows health insurers to rescind a policy — especially when a person needs it most.

A new report by congressional investigators states that the practice of policy rescission is common among insurers and saves them millions of dollars a year.

An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

Two cases highlighted at the hearing were that of Robin Beaton and Otto Raddatz. Beaton’s policy was reportedly rescinded a few days before her scheduled mastectomy because she failed to mention she had once visited a dermatologist because of acne. Raddatz’s policy was reportedly dropped when a pre-existing medical condition he was not aware of surfaced after he was diagnosed with lymphoma.

Rep. Bart Stupak (D-MI) was among the lawmakers who grilled health insurance company executives at a congressional hearing last week.

Late in the hearing, Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show “intentional fraud.”

Each answered “No.”

The outcome of the meeting put the option of a public health insurance plan in a very favorable light.

Proponents of a public plan seized upon the hearing, saying it showed why access to health care cannot be left to private insurance companies.

We will soon see whether a government-run, public health-care plan will serve the uninsured…and hopefully create a more fair world amongst the private insurers.

“Put Glamour in Its Proper Wartime Place”

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Yesterday, Workers’ Comp Insider posted some vintage safety videos from the 1940s and 50s that were designed to teach women how to work more safely. Viewed through the eyes of today, these films are obviously condescending at best and borderline offensive at worst. But it does go to show how far we’ve come, both as a society and an industry preaching safety/loss control.

Or, as the Workers’ Comp Insider folks aptly put it:

We’re happy to note that in the ensuing years, there have been significant advances for both women and for safety!

Below, you can watch two of the videos. The first is a “United States Office of Education Training Film” that’s titled “Supervising Women Workers” and features a boss who probably isn’t but definitely reminds me of a young Jerry Stiller. The second one discusses proper hairstyles for female plant workers during WWII.

Head over to WCI to catch two other old-school, black-and-white safety lessons, one of which was produced by McGraw Hill and comes with the cringe-worthy title “The Trouble with Women.”

The $2 Million Playlist

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musicBack in December 2007, we reported on the case of Jammie Thomas, a Minnesota woman who was found liable for copyright infringement in the first (and still only) music piracy case to go to trial in the United States. Thomas had been found guilty of downloading and distributing 24 songs on the now-defunct file sharing network Kazaa and was ordered to pay $220,000 to the recording industry for her transgression.

Evidently, the story did not end there, however. After determining that he had given incorrect instructions to the jury in the original case, the judge ordered a new trial. This second trial did not go so well for Thomas (now Thomas-Rasset) and on Thursday, the new jury hit her with a $1.92 million fine, or $80,000 per song. While the judgment was less than the $150,000 per song maximum allowed by law, it was significantly more than the average $3,500 settlement reached in the more than 30,000 similar lawsuits that never went to trial (and obviously more than the 99 cents per song it would have cost to acquire the tracks legally).

In repsonse to the verdict, Thomas-Rasset told reporters that she had no intention of paying the fine. “There’s no way they’re ever going to get that,” she said. “I’m a mom, limited means, so I’m not going to worry about it now.”

Although the case seems like an obvious win for the Recording Industry Association of America (RIAA) in its fight against music piracy, some analysts, such as New York attorney Ray Beckerman, believe the verdict may do the RIAA more harm than good.

“Oddly, this gigantic verdict may do more to hurt than help the RIAA, because it offers a vivid demonstration of how out of synch the RIAA’s damages theory is with decades of case law about the reasonableness requirement for copyright statutory damages,” Beckerman said.

The size of the award also goes against a century of case law “deeming punitive awards unconstitutional if they are unreasonably disproportionate to the actual damages sustained.”

Regardless of whether the verdict is ultimately overturned, however, the RIAA has said it remains willing to settle.

The Small Business Crisis

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Though large, corporate failures are what’s grabbing the headlines these days (such as GM, Extended Stay and Six Flags), there has been another crisis brewing — that of the small business failures.

A recent report issued by Equifax states that commercial bankruptcies almost doubled from March 2008 to March 2009 — a staggering statistic. The Western part of the U.S., including California and Texas, was the hardest hit. Equifax states that Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas led the nation in small business bankruptcy filings in March 2009.

There were some dramatic increases year-over-year in commercial bankruptcy filings in a number of Metropolitan Statistical Areas (MSA). The Chicago MSA increased to 199 bankruptcies from 67 in March 2008; Dallas increased to 162 from 73; Portland to 145 from 65 and Denver 157 from 58.

Other hard-hit metro areas during that same month include:

  • Chicago-Naperville-Joliet, IL
  • Anaheim-Irvine, CA
  • Dallas-Plano-Irving, TX
  • Denver-Aurora, CO
  • San Diego-Carlsbad, CA
  • Oakland-Fremont, CA
  • Portland-Vancouver-Beaverton, OR-WA
  • Atlanta-Sandy Springs-Marietta, GA
  • Houston-Sugar Land-Baytown, TX
  • Oregon (excluding the Portland MSA)
  • California (excluding previously mentioned MSA’s)
  • Seattle-Bellevue-Everest, WA

On the other side, the cities with the fewest small business bankruptcy filings are:

  • Gainesville, Fla.
  • Lafayette, La.
  • Lynchburg, Va.
  • South Bend/Mishawaka, Ind./Mich.
  • Springfield, Mass.
  • Trenton/Ewing, N.J.
  • Amarillo, Tex.
  • Cedar Rapids, Iowa
  • Davenport-Moline-Rock Island, Iowa
  • Durham, N.C.
  • Fayetteville, N.C.

Do you feel that small businesses are hurting in your area? Or are they faring well compared to the corporate giants?