One after another, shortly after a diagnosis of breast cancer, each of the women learned that her health insurance had been canceled. First there was Yenny Hsu, who lived and worked in Los Angeles. Later, Robin Beaton, a registered nurse from Texas. And then, most recently, there was Patricia Relling, a successful art gallery owner and interior designer from Louisville, Kentucky.
None of the women knew about the others. But besides their similar narratives, they had something else in common: Their health insurance carriers were subsidiaries of WellPoint, which has 33.7 million policyholders — more than any other health insurance company in the United States.
The women all paid their premiums on time. Before they fell ill, none had any problems with their insurance. Initially, they believed their policies had been canceled by mistake.
They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.
Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women's specific cases without a signed waiver from them, citing privacy laws.
Tens of thousands lost insurance after diagnosis
That tens of thousands of Americans lost their health insurance shortly after being diagnosed with life-threatening, expensive medical conditions has been well documented by law enforcement agencies, state regulators and a congressional committee. Insurance companies have used the practice, known as "rescission," for years. And a congressional committee last year said WellPoint was one of the worst offenders.
But WellPoint also has specifically targeted women with breast cancer for aggressive investigation with the intent to cancel their policies, federal investigators told Reuters. The revelation is especially striking for a company whose CEO and president, Angela Braly, has earned plaudits for how her company improved the medical care and treatment of other policyholders with breast cancer.
The disclosures come to light after a recent investigation by Reuters showed that another health insurance company, Assurant Health, similarly targeted HIV-positive policyholders for rescission. That company was ordered by courts to pay millions of dollars in settlements.
In his push for the health care bill, President Barack Obama said the legislation would end such industry practices. Making the case for reform in a September address to Congress, Obama specifically cited the cancellation of Robin Beaton's health insurance. Aides to the president, who requested they not be identified, told Reuters that no one in the White House knew WellPoint was systematically singling out breast cancer patients like Beaton.
Many critics worry the new law will not lead to an end of these practices. Some state and federal regulators —- as well as investigators, congressional staffers and academic experts — say the health care legislation lacks teeth, at least in terms of enforcement or regulatory powers to either stop or even substantially reduce rescission.
"People have this idea that someone is going to flip a switch and rescission and other bad insurance practices are going to end," says Peter Harbage, a former health care adviser to the Clinton administration. "Insurers will find ways to undermine the protections in the new law, just as they did with the old law. Enforcement is the key."
Certain medical claims triggered recission investigations
In a statement to Reuters, WellPoint said various specified criteria trigger rescission investigations, including certain types of medical claims. The company said it changed its rescission practices to ensure they are handled appropriately after a 2006 review of its policies prompted by public concern over rescission.
WellPoint also said it created a committee that includes a physician for making rescission decisions. The company also noted that it established a single point of contact for members undergoing an investigation and enacted an appeals process for applicants who disagree with the original determination.
During the recent legislative process for the reform law, however, lobbyists for WellPoint and other top insurance companies successfully fought proposed provisions of the legislation. In particular, they complained about rules that would have made it more difficult for the companies to fairly — or unfairly — cancel policyholders.
For example, an early version of the health care bill passed by the House of Representatives would have created a Federal Office of Health Insurance Oversight to monitor and regulate insurance practices like rescission. WellPoint lobbyists pressed for the proposed agency to not be included in the final bill signed into law by the president.
They also helped quash proposed provisions that would have required a third party review of its or any other insurance company's decision to cancel a customer's policy.
The new law does leave open the possibility of reform in this area, these sources say. The reason, they say, is that much of the new legislation is essentially a roadmap, with regulations to be decided later.
"The lack of specificity doesn't mean that nothing is going to be done," said a senior congressional staffer who has played a key role in the health reform debate, "The law grants HHS (the Department of Health and Human Services) the discretion to promulgate regulations. This is very much a work in progress."
Among other things, the staffer said, the White House could revisit proposing tough new regulations requiring third party review of policy cancellations.
Victoria Veltri, the general counsel of Connecticut's Office of Healthcare Advocate, a state agency that investigates complaints by policyholders, says she has seen the success of such a process in her home state. One company, Aetna, has voluntarily agreed to engage in the third party review, with what she described as favorable results.
"I haven't seen an Aetna case in our office since they went to the third party review process," she said. "It's a powerful tool to have a third set of eyes required before someone is rescinded."
For its part, WellPoint said it began offering third-party reviews in 2008.
A senior Obama administration official said he remained confident that mandatory third party reviews of rescissions is not entirely out of reach.
"It might take some wrangling with the insurance industry, some strong-arming, maybe even use of the presidential bully pulpit," he said on condition of anonymity.
Insurers' anathema: Breast cancer and pregnancy
The cancellation of her health insurance in June 2008 forced Robin Beaton to delay cancer surgery by five months. In that time, the tumor in her breast grew from 2 centimeters to 7 centimeters.
Two months before Beaton's policy was dropped, Patricia Relling also was diagnosed with breast cancer. Anthem Blue Cross of Kentucky, a WellPoint subsidiary, paid the bills for a double mastectomy and reconstructive surgery.
But the following January, after Relling suffered a life-threatening staph infection requiring two emergency surgeries in three days, Anthem balked and refused to pay more. They soon canceled her insurance entirely.
Unable to afford additional necessary surgeries for nearly 16 months, Relling ended up severely disabled and largely confined to her home. As a result of her crushing medical bills, the once well-to-do businesswoman is now dependent on food stamps.
"It's not like these companies don't like women because they are women," says Jeff Isaacs, the chief assistant Los Angeles City Attorney who runs the office's 300-lawyer criminal division. "But there are two things that really scare them and they are breast cancer and pregnancy. Breast cancer can really be a costly thing for them. Pregnancy is right up there too. Their worst-case scenario is that a child will be born with some disability and they will have to pay for that child's treatment over the course of a lifetime."
Isaacs is a former federal prosecutor who spent much of his time with the U.S. Justice Department investigating corporate wrongdoing. Among state and federal regulators, he is now considered one of the toughest and most experienced foes of the health insurance industry. He has hired retired FBI agents to investigate full-time the practices of WellPoint and its Anthem Blue Cross subsidiary in California.
Still, Isaacs feels outgunned: "The industry just has these tremendous financial, legal and political resources that others don't," he said. "In my own state, regulators are often afraid or unwilling to go up against them. It is hard to figure out what the future brings."
In July 2008, Isaacs' office sued Anthem Blue Cross, alleging that more than 6,000 people in the state of California had their insurance canceled due to its "illegal rescission practices." The litigation is ongoing.
Last February, the insurer agreed to pay a $1 million fine and an additional $14 million in restitution to alleged victims to settle another lawsuit. This one was brought against it by the California Department of Insurance, which said the company violated state laws by improperly rescinding the policies of 2,330 people.
A year earlier, Anthem Blue Cross agreed to pay a $10 million fine to settle similar charges brought by a second agency in the state, the California Department of Managed Health Care, alleging that WellPoint had illegally rescinded more than 1,100 policyholders.
Despite the settlements, WellPoint denies wrongdoing. In a statement for this story, the company said: "The settlements you referenced with the California regulators expressly denied any admission of wrongdoing on the part of the company; companies settle matters for a number of reasons."
As part of his investigation, Isaacs has sought information from WellPoint about its use of algorithms to single out women with breast cancer or who are pregnant. The company has fought him vigorously and so far largely kept information from him, Isaacs said.
But in response to an inquiry last year from the House Energy and Commerce Committee, which was investigating rescission, WellPoint said that it initiates a claims review every time policyholders receive medical treatment for certain conditions. The company listed diagnostic codes that could trigger investigations. One was for breast tumors.
Pregnant women automatically had histories examined
During an audit of Anthem Blue Cross by the California Department of Managed Health Care, company employees showed regulators internal records revealing that pregnant women also automatically had their medical histories examined.
WellPoint says that even though the company routinely investigates policyholders with diseases such as breast cancer shortly after a diagnosis, it only cancels policies if it finds something wrong. It says the practice is necessary to keep down costs for other policyholders.
In testimony before the House committee last year, Brian Sassi, the president and CEO of WellPoint's consumer division, asserted: "I want to emphasize that rescission is about stopping fraud and material misrepresentation that contributes to spiraling health care costs. Rescission is a tool employed by WellPoint and other health insurers to protect the vast majority of policyholders who provide accurate and complete information from subsidizing the cost of those who do not."
But state regulators, congressional investigators and consumer advocates say that in only a tiny percentage of canceled health insurance cases was there a legitimate reason.
A 2007 investigation by the California Department of Managed Health Care bore this out. The agency randomly selected 90 instances in which Anthem Blue Cross of California dropped the insurance of policyholders after diagnoses with costly or life-threatening illnesses to determine how many were legally justified.
None were. "In all 90 files, there was no evidence (that Blue Cross), before rescinding coverage, investigated or established that the applicant's omission/misrepresentation was willful," the DMHC report said.
Company prides itself for having women at helm
Singling out women with breast cancer for aggressive investigation with the intent of canceling their insurance stands in stark contrast not only to the public image WellPoint cultivates for itself but also to the good work it does for many other policyholders with breast cancer.
WellPoint CEO Braly has taken a strong personal interest in women's health issues. Foremost among them is how to increase services to people with breast cancer.
The company prides itself on being one of the United States' largest corporations with women at the helm. Besides Braly, two high-powered, politically connected women sit on WellPoint's board: Susan Bayh, the wife of retiring Democratic Sen. Evan Bayh of Indiana, and Sheila Burke, who was chief of staff to former Senate Republican leader Bob Dole.
On Braly's initiative, WellPoint has funded groundbreaking studies about the disparities in quality of health care to minority women — including women with breast cancer.
WellPoint has worked to encourage mammography for at-risk women. Personalized letters — followed up by phone calls — are sent to more than 80,000 women between the ages of 52 and 69 if they have not had a mammogram in the past year. The company conducts automated calls for women ages 40 to 69 to make sure they are getting mammograms.
Once diagnosed, WellPoint has set up an "Breast Cancer Resource Center" for its policyholders to help them "navigate the complex health care system."
'I can't pay for my medicine'
And in May 2009, WellPoint's charitable foundation, the WellPoint Foundation LLC, provided a grant for the American Cancer Society for its "Hope Lodges," which allow cancer patients and family members free lodging and support while receiving care far from home. The grant funded Hope Lodges in Wisconsin, Ohio, Indiana and Kentucky, where Patricia Relling resides.
To Relling, charitable giving does not mitigate the harm done to her and other cancer patients who have had their health insurance canceled after a breast cancer diagnosis. "I can't pay for my medicine," she said. "I haven't been able pay for surgery that I need for two years. It doesn't make any sense."
Relling adds: "I laud people who give money to charity — but not at the expense of cancer patients and people who have paid health insurance premiums for 20 years and never missed a payment — and then get canceled when they most need their coverage. What about the thousands of people who have their policies canceled by their company for no good reason? When are they going to make that right?"
Purging policy holders with expensive diseases
Why would WellPoint on the one hand work to improve health care for women with breast cancer while automatically investigating every single woman diagnosed with breast cancer for possible cancellation of their policies?
Karen L. Pollitz, a research professor at the Health Policy Institute at Georgetown University, offers one possible explanation: "It is important for these companies' profit margins that they get rid of policyholders with expensive diseases," she said. "If one company were to stop, it would no longer be competitive with the others. They argue they have to do this to stay in the game."
The investigation last year by the House Energy and Commerce Committee determined that WellPoint and two of the nation's other largest insurance companies — UnitedHealth Group Inc and Assurant Health, part of Assurant Inc — made at least $300 million by improperly rescinding more than 19,000 policyholders over one five-year period.
WellPoint itself profited by more than $128 million from the practice, and the committee suggested that the figure might be largely understated because the company refused to provide information about cancellations by several subsidiaries.
During the yearlong debate over health care reform, as the White House and Democrats in Congress savaged insurance industry practices, WellPoint took as much heat as any company. Among other things, it was slammed for trying to raise premiums by as much as 39 percent for some customers. One in nine of all Americans are policyholders with WellPoint or one of its subsidiaries.
Braly, who was named CEO of the Indianapolis-based company in February 2007, appeared before a U.S. congressional hearing two months ago and defended the rate hikes as reflecting higher medical costs.
Dropped days before double mastectomy
Losing her policy had serious consequences for Beaton, the retired Texas nurse. In June 2008, she learned that her insurance had been dropped just as she was about to undergo surgery for breast cancer. She had been recently diagnosed and told her cancer was a particularly aggressive type that would require a double mastectomy.
On the Friday before the Monday she was scheduled for surgery, Beaton's insurance company said it would not pay for the operation. It also informed her that it was launching an investigation of her medical history to see if she had misled the company and would sue if it found that to be the case.
Beaton's insurance problems stemmed from a visit to the dermatologist's office just before her breast cancer diagnosis. A word written on her chart was mistakenly determined to be precancerous, she said in testimony last year before the congressional committee. In fact, she was being treated for acne.
Even after her dermatologist told the insurer he indeed had only treated her for acne, her lack of insurance meant Beaton could not schedule her surgery.
Her doctors had told her that even the slightest delay might endanger her life, so Beaton was frantic. She contacted anyone who might be able to help her. As a nurse, she knew which charities and hospitals to plead her case. Still, she got nowhere until her congressman, Republican Representative Joe Barton, successfully took up her cause.
Five months elapsed between the time her surgery was originally scheduled and the time WellPoint agreed to pay for it. During that delay, the cancerous mass in her breast had more than tripled. She had to undergo a radical double mastectomy and her survival rate is a fraction of what it would have been had she been allowed to have the surgery earlier.
Insurers will 'do anything to get out of paying for cancer'
"Blue Cross and Blue Shield will do anything to get out of paying for cancer," Beaton said at the hearing.
After her surgery, Beaton joined a cancer support group. Four of the women in her group, she says, had their insurance canceled as a result of a cancer diagnosis. Two of the four subsequently had to declare bankruptcy because of staggering medical bills.
Earlier, in November 2006, WellPoint dropped the policy of another Texas woman — shortly after she too was diagnosed with a cancerous lump in her breast, according to congressional investigators who have reviewed internal company records.
WellPoint told the Energy and Commerce Committee the cancellation of the woman's policy was justified because she had not told them that she had osteoporosis and bone density loss — even though neither has anything to do with breast cancer and an insurance agent rather than the woman herself may have been responsible for those minor omissions.
Investigators for the committee stumbled upon the woman's case during their inquiry into rescission. But in the records that WellPoint produced, the woman's name and contact information was blacked out.
When the committee asked WellPoint for more information about her, the company refused to provide it, citing federal privacy laws for their policyholders.
Committee investigators said they then suggested WellPoint could itself inform the woman that a congressional committee had interest in her case. If the woman wished to talk to the committee, they suggested, she could contact it on her own.
WellPoint declined to do that as well, according to the committee records.
Stephen J. Northrop, WellPoint's vice president for federal affairs, wrote to Energy and Commerce Committee Chairman Henry A. Waxman, a California Democrat, explaining why the company could not comply:
"You asked that WellPoint send a letter to certain policyholders whose de-identified files WellPoint produced to the Committee earlier this year. The letter you would have proposed would explain that there is an ongoing Committee inquiry and would invite the policyholders to call a Congressional staff member who works for the committee.
"However, as WellPoint's outside counsel advised your staff by telephone yesterday, we are prohibited by the federal Health Insurance Portability and Accountability Act (HIPAA) from using our policyholders' protected health information for this purpose."
In a brief telephone interview with Reuters and later via email, Northrop declined to comment. In the email, Northrop said that a company spokesperson would answer further questions about his correspondence with the congressional committee, but the spokesperson did not address that particular matter.
In California, Yenny Hsu has a similar story to tell about WellPoint subsidiary Blue Cross Anthem. In a civil suit filed against the insurer in 2006, Hsu alleged her health insurance was rescinded shortly after a breast cancer diagnosis.
The pretext for canceling her insurance, the lawsuit alleged, is that Hsu failed to disclose having been exposed to Hepatitis B for a short time as a child. Her lawsuit has since been settled on undisclosed terms, her attorney, William Shernoff, said in an interview.
In Kentucky, Relling underwent her double mastectomy in April 2008. Anthem Blue Cross and Blue Shield of Kentucky footed the bill. Then in December of that year, she underwent reconstructive surgery, and Anthem paid once again.
The following month, however, her nightmare began.
Relling suffered a horrific staph infection caused by her stay in the hospital. She was rushed back there in the early morning of January 15 and was admitted shortly after 5:30 a.m.
The incision from her reconstructive breast surgery was reopened. Her abdomen was flushed with six full liters of antibiotic fluid until the incision was closed. Two days later, her condition worsened, requiring yet another emergency surgery.
This second surgery necessitated multiple blood transfusions simply to keep her alive. The infection was so severe her entire umbilicus, the interior of her belly button, had to be removed, as well as many abdominal muscles, because the infection had already eaten away most of it.
While recovering, Relling started having trouble with her insurance. Her medication after the surgery cost $4,446 a month. But Anthem would only pay for 10 days and then no more, she recalled in an interview.
Luckily, one doctor gave her free samples and another found a dispensary where could obtain the medication at a reduced price. But other days she would go without.
In June 2009, she was informed that her insurance was being canceled — just before she was about to undergo another reconstructive surgery, which she was forced to postpone. She has now gone 16 months without the necessary surgery.
As a result, she is severely disabled. The pain and discomfort often only allows her to be able to stand for 20 or 30 minutes a day, sometimes even less.
Reconstructive surgery might help her to become mobile again and perhaps go back to work full-time. She once enjoyed successful careers as an art gallery owner, interior decorator, and as a writer. She had plenty of money, drove a Mercedes and traveled the world on whim. Not anymore.
Today she is on food stamps. She has taken her Social Security early, which means that when she is older, she will be eligible for fewer benefits. She buys clothes from consignment stores she once donated to. She recently got some part-time work as a copywriter, which she can do from home, but that barely pays for her drug prescriptions, let alone surgery.
She spends her days calling pharmaceutical companies because many now have programs to assist indigent customers.
Relling waits hours to be seen by a doctor at a clinic, if she can be seen at all. "The thing I didn't understand about going poor is that your time no longer has value to others," she says.
She seeks out religious charities to pay the rent. "Some have rules that they will only give to people who belong to that church or of their faith."
One charity she contacted after being informed that it provides financial assistance to breast cancer patients told her that it does so only for women of color and of a certain age. "This is my full time job now. You go around and around and around," she says, her voice trailing her off.
Insurer sent letters to wrong address, dropped her for not replying
Technically, rescission was not the reason Relling lost her health insurance, according to correspondences with the company she provided to Reuters. Rather, it was canceled because she did not answer letters from her insurance company requesting information about her employment history.
Relling says the letter was sent to an address which she hadn't lived at it for some time, and she never even saw it until recently. When she brought this information to WellPoint's attention, she said, the company ignored her.
"Rescission is just one method to get rid of someone or no longer provide them coverage," says Isaacs, the deputy Los Angeles City Attorney. "They can say forms are not filled out properly; they will just find any pretext."
Congressional investigators for the House Energy and Commerce Committee who have investigated Relling's claim say they have concluded that WellPoint improperly canceled her insurance. The company declined to comment at all on her case, saying that client confidentiality precludes them from doing so, although Relling says she welcomes the company to talk publicly about the matter.
On her living room table still sits correspondence with her former insurance company.
Deb Moessner, the company's president and general manager, wrote Relling last July 13: "Ms. Relling, please know that is never pleasant to deliver unfavorable news to our members. However, there are situations that occur, such as yours, that leave us with no alternatives. Because you or your agent did not provide this vital information, your ... health coverage terminated effective July 1, 2009."
In the letter, Moessner added: "Please know that we wish you the best in regaining the healthy lifestyle you described prior to your recent illnesses."