WellPoint, Aetna led U.S. insurers in coverage denial

WellPoint Inc., Aetna Inc., Humana Inc. and UnitedHealth Group Inc. denied health coverage to 49 percent more people over the past two years, citing pregnancy or plans for adoption among their reasons, a U.S. report found.

The insurers rejected 651,000 applicants from 2007 to 2009 for illnesses or conditions they had before applying for coverage, according to the report by the House Energy and Commerce Committee, led by Rep. Henry Waxman, a California Democrat. Each company had a business plan to exclude pre-existing conditions, according to the report.

A Bloomberg National Poll released Wednesday found voters favor by a 47 percent to 42 percent margin repealing the health-care overhaul law Democrats passed, adding to Republicans’ momentum to take control of Congress in the Nov. 2 elections. The report may help Democrats focus the public on the law’s more-popular provisions, among them a ban on insurers denying coverage due to medical conditions, said Peter Harbage, a health-care consultant in Sacramento, Calif.

“For Republicans running on a repeal health-reform platform, the report forces them to tell voters why insurers should be able to deny coverage to those who need it the most,” said Harbage, previously an adviser to John Edwards, the disgraced former Democratic presidential candidate. The report cited internal insurer documents the panel obtained.

The companies turned down 257,100 people last year who sought to buy benefits on their own and not through employers, the House report said. They denied 172,400 applicants in 2007, the report said. Enrollment increased by 16 percent in that time, according to the committee.

Insurers agreed to end denials for pre-existing conditions early in the health-care debate last year, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s trade group in Washington, D.C. Until all consumers are required to buy health insurance, the coverage restrictions are needed to keep people from gaming the system, he said.

“In the current individual market, applicants undergo an underwriting process to discourage people from purchasing coverage only after they need medical services, which drives up costs for all policyholders,” Zirkelbach said.

Donald Nathan, a UnitedHealth spokesman, declined to comment. Jill Becher a  spokeswoman for Indianapolis-based WellPoint, and Jim Turner, a spokesman for Humana, referred questions to the trade group.

The House reports “document what many health insurers, including Aetna, have been saying for years—that the individual market needs to be reformed so we can improve access for all consumers,” said Fred Laberge, an Aetna spokesman, in an e-mail. “Improving access without also addressing the underlying issue of rising medical costs will lead to higher premiums for many consumers.”

One company cited “improved pre-existing exclusion process” as a way to increase business, said the report. One of the companies had a list of 425 conditions that could be used to deny people insurance coverage, including pregnancy, diabetes and heart disease.

Other documents in the report showed that people who were surgical candidates, pregnant, female and “treated for infertility within the past five years,” and “any applicant with a (body mass index) 39.0 or greater” were denied health insurance without any internal review by the company. The committee obtained the documents in response to letters Waxman sent in March. The report didn’t specify the insurers that carried out the actions.

The economy’s weakness probably pushed health plans to deny more applicants, said Harbage, the consultant, whose clients include not-for-profit foundations and unions. Healthy customers were more likely to drop coverage over the past few years, leaving insurers with sicker customers more likely to drive up medical costs, he said.

“Insurers looked for more ways to manage their risk and profit,” he said. “The result is that many people who needed coverage were turned away.”

Even as a plurality supported the health overhaul’s repeal, the Bloomberg poll found strong backing for most of the law’s provisions. Three-quarters favor its ban on insurance companies denying coverage because of pre-existing conditions; 67 percent support allowing children as old as 26 to stay on their parents’ policies. Also, 73 percent want to keep the addition of more prescription-drug benefits for those on Medicare, the U.S. government’s health program for the elderly and disabled.

The survey of 721 likely voters was conducted for Bloomberg on Oct. 7-10 by Selzer & Co., a pollster based in Des Moines, Iowa. It has a margin of error of plus or minus 3.7 percentage points.

The four insurers treat pregnancy as a pre-existing condition and generally don’t offer coverage to expectant mothers, the House committee said in a second memo that cited company documents.

Expectant fathers and those about to adopt are often denied as well, and documents show the companies have moved to limit the availability of riders that can be bought to add maternity coverage, the report said. One rider limited a woman to $6,000 in maternity benefits after she paid extra premiums for four years, the report said.

In company documents, executives said maternity coverage resulted in “higher prices, lower margins and loss of market share,” the report said. Another document said one insurer typically spent 90 percent of the premiums it collects on medical care for policies with optional maternity benefits, “a money-losing ratio.”