Thursday, October 26, 2006

Of Insurance Companies and Morality

Recently, a blogging acquaintance whose opinions I respect (if rarely agree with) posited that “insurance companies are immoral.” His premise was that, since carriers make a profit, but do not then plow that profit (back) into the healthcare system, they essentially consume funds that could be served to increase medical research spending, build new facilities, etc.

I had, I must admit, a visceral reaction to this: after all, since I represent said carriers, I must be part of the problem, and therefore immoral myself.

After careful reflection, though, I came to realize that my commenter’s assertion was unsupportable on its face; that is, companies (whether health insurers, car manufacturers, or newspaper publishers) are simply impersonal entities and, as such, can be neither moral nor immoral. Consider this: is a rock moral or immoral? Well, one could say that a rock that hits you in the head is immoral, but it is really the ethos of the person who heaved it at you that’s in question. Rocks and insurers, are, in fact, amoral.

Further, it seems illogical to me that one should expect an insurance company to take its profits and gift them to, for example, science. For one thing, the company (presumably) exists to make a profit for its shareholders, and to provide employment for its, well, employees. It is not in the business of delivering health care: it is in the business of paying for it. By way of example, no one expects Campbell’s to provide a personal nutritionist to folks who buy vegetable soup. Does that make them “immm-mm-moral?”

So why would an insurance company be any different?

On the other hand, businesses are required to follow the law. Again, the law itself is neither moral nor immoral: it is a set of rules by which we, as a society, have agreed to abide. Reason I bring this up is because my personal convictions (outlined so eloquently above) are being sorely tested of late.

The group insurance market is a funny thing (if by “funny” one means “frustrating”). To wit: most group health insurers require that, if you’re going to place a group with them, you must write not only the health insurance, but the group life insurance, as well. From a business standpoint, this makes sense: the group health business is barely profitable, while the life side is extremely so, thereby “balancing things out.” And, truth be told, it often makes sense to do it this way: one bill, one phone number, etc. But there are times where it is not desired, and the law in Ohio says that a carrier cannot require a “tie-in” sale such as this.

At least, that’s what I’ve always believed. I used to have a copy of the pertinent law; it is long ago lost in the paper black hole that is my office. I recently had occasion to write a small group case with XYZ [ed: Name of carrier redacted not to "protect the innocent," but because it is not the only "guilty" one], which has not previously had the life requirement. Now they do. Problem is, I already have the group life for this group written with another carrier, and neither the client nor I are particularly moved to change that. Now, though, XYZ has refused to underwrite this group absent the life. No problem, says I: I’ll dig up my copy of the relevant section of the ORC (Ohio Revised Code) and wave that in front of them. Only I can’t find the darned thing.

No problem, repeats I: I’ll find it online (the ORC and OAC are both on the web). Several hours (and cups of coffee) later, no dice. Still no problem, hopes I: I’ll call up my friendly neighborhood insurance department, they’ll have it toot-sweet [I know, just let it go]. Only they can’t find it, either.

No problem, panics I: I’ll call up a friend who works at LexisNexis, that’ll do the trick. Only, several hours later, she comes up empty-handed, as well. Now what to do? I know that they can’t force me (I actually have a very good reason to know that I’m right, but that’s not relevant here). Except, they can. They won’t back down, time is running out, and I won’t put my client at risk. Back down, counsels I: and I did.

So what’s the “moral” of this little tale? Well, it’s pretty simple: insurance companies are not immoral.

But insurance company policies sure can stretch that envelope.
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