Abuse, Bias by Insurers Alleged in Cancer Cases

Consumers Union and a coalition of health groups filed a petition with the state Monday charging that insurance companies have engaged in an “unconscionable pattern of abuse and discrimination” against families who have children with cancer.

The petition, filed with Insurance Commissioner Roxani Gillespie, contends that insurance companies have added to the trauma of cancer for many families by delaying payments, denying benefits for procedures that should be covered, raising premium rates and imposing limits on benefits without proper notice.

The petition did not single out any individual insurance companies but called on the commissioner to investigate these alleged practices and revoke the licenses of companies found to act improperly.

“Health insurers operate with almost total disregard for both the law and for simple decency,” said Rose Hughes, a leader of the recently formed Parents of Kids with Cancer. “The insurance commissioner has to protect the public from such abhorrent abuse.”

When her son had cancer, Hughes said, her family lost their house, car and other belongings--in part because their insurance company delayed some payments for months and refused to pay for some treatments that should have been covered.

Under state law, insurance companies are required to pay all claims within 30 days.

Brent Barnhart, a lobbyist for the Assn. of California Life Insurance Companies, said that most health insurance companies meet the deadline. He acknowledged, however, that disputes arise over claims that cancer victims believe should be covered but are considered by the companies to be experimental and therefore not eligible for payment.

Gillespie’s office issued a statement saying she is “very concerned about the availability and affordability of health coverage--and the efficient delivery of such services--in California.”

Gillespie, who is considering running for the office of state insurance commissioner in 1990 when it becomes an elective post for the first time, expressed a willingness to cooperate with the coalition that filed the petition.

But her office noted that the commissioner oversees only a portion of the health insurance industry because some companies are regulated by other agencies and some insurers are exempt from state regulation.

The petition cites nine alleged cases of abuse and discrimination against cancer patients by insurance companies. In some cases, the document claims, delayed payments and denied benefits created extreme financial hardship for the families and jeopardized treatment for the patients.

Representatives of the coalition conceded the petition was intended, in part, to help shape next year’s race for insurance commissioner and make health insurance an important part of the public debate.