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Fighting Insurance Abuse in Court

By Joe Consumer

The high profile and, many believe, politically-motivated litigation by a few state Attorneys General (some in defiance of their own Governors) to invalidate the new health insurance reform law is nothing compared to the litigation that will likely be needed to force insurance companies simply to comply with the law. 

Today we learned that ?insurance companies are already arguing that, at least for now, they do not have to provide one of the benefits that the president calls a centerpiece of the law: coverage for certain children with pre-existing conditions? ? conditions like ?asthma, diabetes, birth defects, orthopedic problems, leukemia, cystic fibrosis and sickle cell disease.?  (In other words, they want things to be business-as-usual, like how they handled 10-day-old Houston Tracy, who needed surgery to correct a congenital heart defect and whose insurer initially denied the claim calling the birth defect a ?pre-existing condition.?)

The insurers now seem to be saying that rather than refuse to cover treatment for a pre-existing condition, the company ?might simply deny coverage for the child or the family? until 2014, when they are required to provide coverage.  Whoa.  The Times writes,

Senator John D. Rockefeller IV, Democrat of West Virginia and chairman of the Senate commerce committee, said: ?The ink has not yet dried on the health care reform bill, and already some deplorable health insurance companies are trying to duck away from covering children with pre-existing conditions. This is outrageous.?

The White House says it will try to clarify this through regulations but ?lawyers said the rules could be challenged in court if they went beyond the law or were inconsistent with it.?  Gee, an insurance company forcing a case into court? 

Welcome to the world of policyholders and their attorneys, who spend a good chunk of their life trying to get intransigence insurance companies to comply with the law and pay legitimate claims - like the Chinese drywall case that a homeowner recently won in Louisiana.  Remember the ongoing, enormous Chinese drywall mess? (?Many homeowners in southeastern states such as Louisiana and Florida have found that drywall imported from China amid the housing boom and rebuilding efforts after the 2004 and 2005 hurricanes emits sulfuric gases that smell bad, make people feel sick and corrodes metal appliances, wiring and components in homes. Insurers have universally been denying claims.?)

In this new case, a local judge ruled that ?the policy exclusions that insurers have commonly been using to deny claims for drywall damage don?t apply.?  For example, insurers were actually trying to get out of covering a homeowner's claim by applying an "environmental damage" exclusion, even though clearly the damage to homes came from defective building materials - not pollution.  The legislature is also considering a bill to prevent homeowners who file these claims from being cancelled. 

Oh, they?ll need that law.  And they?ll need good trial lawyers, too!

Full post as published by ThePopTort on March 29, 2010 (boomark / email).