Insurer cancels entire state's coverage to avoid paying one client's medical costs

Ian Pearl. Photo:img.getactive.hub.com

In a blatant example of what is wrong with the US health insurance industry, New York-based Guardian Life Insurance Co. canceled plans throughout the state in order to avoid continuing coverage for Ian Pearl, a 37-year-old man with muscular dystrophy, who requires round-the-clock medical treatment costing $1 million a year. New York state prohibits insurance companies from cutting costs by canceling individual patients’ coverage, so Guardian did an end run around the law by simply ending all New York health plans similar to Pearl’s.

According to Pearl’s parents, whose Guardian premiums had risen over the years to $3,700 a month, the insurance company had been trying to find an excuse to discontinue their policy for a long time before it resorted to this sweeping move. An email exchange between Guardian executives obtained by the Washington Times revealed that the mass health plan cancellation was considered necessary to “get rid of” high-cost “dogs” like Pearl.

Lest you think Guardian was forced into this action to, say, avoid bankruptcy, last year the insurer reported profits of $437 million, a 50 percent increase over $292 million in 2007.

A federal court has already ruled that the company’s behavior was legal, so unless the Department of Health and Human Services intervenes, Pearl will lose his benefits on December 1. (HHS is reviewing the case.)

Meanwhile, if ever there was a doubt that our current health insurance industry discriminates against those most in need of health care, this deplorable situation should erase all skepticism.