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Insult to Injury - Disability Insurance Reform


OP ED by Ray Bourhis


  • Health care providers that allow policyholders to die by refusing to approve covered medical care.

  • Disability insurers that bankrupt claimants with spinal injuries, brain damage, heart disease and AIDS by terminating their benefits.

  • Homeowners carriers that point to incomprehensible language in their policies to justify refusing to pay rebuilding costs to hurricane, firestorm, earthquake and tornado victims.

  • Companies that tell policyholders if they make a claim their policies won't be renewed.

  • Insurers that refuse to back off lowball settlement offers based on so-called opinions from their hand picked experts.

  • Policies that require insureds to submit all disputes to binding arbitrations performed by arbitrators chosen by the company.

  • Insurance regulations, written by industry lobbyists, placing strict limits on the recoveries available to defrauded policyholders.

  • Court rulings and legislation placing "caps" on damages to assure that profitability from fraudulent practices will not be deterred.

I love the bumper sticker that says "If you're not outraged, you're not paying attention."

I don't know about you, but I have finally come to the end of my rope with the insurance industry. I have finally really had it.

How many people are going to lose their savings, their homes and even their lives before insurance companies are forced to knock it off.

I understand that this is a huge industry. That in addition to insurance it owns financial institutions, housing developments, farms, ranches, grocery chains, pharmaceutical companies, manufacturing facilities and high rise office buildings in every city. Not just here but all over the world. I get it that these mega-corporations are multi national money machines. I realize it is no easy task to make them obey the law and that their public relations and advertising budgets allow them to ignore bad publicity as well.

I know that people - claimants - don't want to fight. Especially destitute, ill and disabled ones. That they don't want to go through three and four day depositions and three or four year legal battles.

But I am sick of reading confidential high level company memos that tell employees to shred documents and that set up elaborate systems for targeting expensive claims.

Buying insurance is no longer a choice. We have to have it - to drive, to purchase a home, to get past the receptionist in a doctor's office.

So we need to see some action on these problems - in Congress and in our state legislatures. We need to stop forcing companies that are willing to play it straight with their customers to compete with those who are robbing them blind. Public officials need to focus on these problems and to address them. We need some serious insurance reform. Now.

A good place to start would be with an obscure provision in our laws called ERISA Preemption. This may sound somewhat complex but it's very simple. ERISA Preemption means that if you lose your savings, home or life due to even the most criminal of fraud by an insurance company on a policy you obtained at work, there's not a damn thing you (or your heirs) can do about it. You have no right to recover for the losses resulting from the fraud. If you lose every dime you can't hold your insurer responsible for any of it. Congress can solve this problem with a quick vote and the President can approve it with the stroke of his pen.

ERISA reform wouldn't solve all insurance problems. But it would be a good start. The next step would be to improve policyholder protections at the state level. California and half a dozen other states have good models. It would be easy to duplicate them. Then, we need to improve the regulatory process. To get some effective insurance commissioners in office and give them the tools they need to do their jobs. Again, California, with Insurance Commissioner John Garamendi, proves that this can be accomplished.

Once all of this happens perhaps we can start to believe the promises. Perhaps then we will be in good hands with our insurance companies them. Perhaps they will be like a good neighbor, perhaps they will be fast fair and friendly. But not yet. Not now. And until then, like the bumper sticker says, we had better be paying attention.


Author Ray Bourhis