Health insurer cancels entire program to avoid paying muscular dystrophy patient

Ian Pearl is a 37 year old victim of muscular dystrophy, confined to a wheel chair and only able to breathe with the assistance of the tube in his throat connecting him to his ventilator.

With all of the obvious challenges in Ian’s life, he’s been fortunate. Thanks to a small business health insurance policy purchased by Mr. Pearl’s father from Guardian Life Insurance Co., Ian’s medical expenses – which run about $1 million annually -have been covered by his policy.

But Ian’s luck appears to have run out.

Barred from discriminating against individuals who submit large claims for payment, Guardian has opted to simply cancel the lines of insurance that provide the coverage Ian needs in all the various states where they do business – all just to avoid paying for Ian’s care.

Believing that this could not possibly be legal, Ian and his parents brought an action in federal court to stop the cancellation. The court ruled that the company had not violated ERISA because it canceled entire policy lines – not just Ian’s. The Pearls also claimed that Guardian violated HIPAA. The court ruled that only the Dept. of Health and Human services can enforce HIPAA and that private citizens cannot sue under it.

Following the court’s decision,  Pearl appealed to HHW under the Bush Administration but to no avail. He is now petitioning HHW once again, hoping for a better result from the current administration.

Barring intervention by HHW, Ian will lose his health insurance coverage on December 1st, leaving Ian and his family on their own as they try to keep Ian alive at the cost of $1 million a year.

Does Guardian feel badly about having to make such a difficult decision that will so grievously impact on the life of this one man?

Apparently not.

In an e-mail, one Guardian Life Insurance Co. executive called high-cost patients such as Mr. Pearl “dogs” that the company could “get rid of.”

Nice. Of course, this was not the “official” explanation from the company.

…policies such as Mr. Pearl’s – which offered unlimited home nursing – had simply become too expensive for new small-business customers to buy, and that even Medicaid and Medicare do not cover 24-hour home nursing.
Via The Washington Times

This explanation could, arguably, make some sense if it were not for the fact that Guardian long ago scaled back their policies to the point where they already no longer offer coverage for the home care which accounts for the largest share of the expenses Ian Pearl incurs as a result of his illness. The only reason Ian still has this coverage is that his policy was purchased long ago when the company did include this offering.

Thus, it must be about the money. Apparently, Guardian simply can’t afford to lose a million bucks a year on Pearl’s care and stay in business, despite the fact that the company reported profits of $437 million last year, a 50% increase over the $292 million they earned in 2007. Not bad – but it gets even better. In 2008, Guardian paid out dividends of $723 million and still had $4.3 billion in capital reserves.

Here’s the ‘kicker’. Guardian is a mutual company, meaning that the profits it earns are paid out to the policyholders. Thus, that $723 million paid out in dividends went to the Company’s policy holders. Does this sound familiar? While not exactly the same as the co-op insurance plans approved by the Senate Finance Committee in lieu of the public option, it is about as close as you can get to it.

A public insurance option could not do to Mr. Pearl what Guardian has done.

Meanwhile, one 37 year old man with muscular dystrophy, and the family that cares for him, are left to face a terrifying future – all because of the greed and inhumanity of a private insurance company.

Whatever your ideological preference – how can this possibly be okay with anybody?