Would You Kill For a Million Bucks?

Would you kill a wheelchair-bound man for a million dollars? Probably not. But there are those who would. If you needed further proof that the health insurance industry is broken, and needs some new controls, here’s a perfect example of what’s wrong with it.

Ian Pearl

Ian Pearl is 37 years old, and he suffers from muscular dystrophy. He is confined to a wheelchair, and is hooked up to a breathing tube, but he refuses to just give up and die. He is insured by Guardian Insurance of New York, which pays for the one million dollars in care, each year, that it takes to keep Mr. Pearl alive. Most of that is for around the clock, in-home nursing care – for operation of his ventilator, hourly breathing treatments and continuous intravenous medication.

Ian Pearl has been fortunate, most of his life, to be covered under the Guardian small-business health plan his father bought through his remodeling company. Generous by modern standards, the health insurance plan covered home nursing, something most small-business plans do not cover today. In the state of New York, where Mr. Pearl’s business operates, 54 other employers offered the Guardian plan. Their policies covered nearly 500 employees and dependents, including two other severely ill people.

But Guardian grew weary of paying Mr. Pearl’s expenses, and decided to find a way to get out of its obligation. Legally barred from discriminating against individuals who submit large claims, they couldn’t simply cancel Mr. Pearl’s policy. Besides, that would just be wrong. Then someone at Guardian struck on the perfect answer. Instead of canceling Mr. Pearl’s policy, Guardian chose to cancel entire lines of coverage altogether, in whole states, to avoid paying high-cost claims like Mr. Pearl’s. In an e-mail, one Guardian company executive called high-cost patients such as Mr. Pearl “dogs” that the company should “get rid of.”

A Guardian spokesman said 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. His parents, Warren and Susan Pearl of Fort Lauderdale, Florida, said their health insurance premiums had risen over the years to $3,700 a month. That’s $44,400 a year. Fortunately, they are in a position to pay these premiums.

A federal court ruled that the company’s actions were legal. The judge found that the company had not violated the Employee Retirement Income Security Act (ERISA), because it canceled entire policy lines. The Pearls also claimed Guardian violated the Health Insurance Portability and Accountability Act (HIPAA), but the judge found that only HHS can enforce that law and that private citizens cannot sue under it.

The Pearls appealed to HHS under the Bush administration and were told the agency could do nothing, Warren Pearl said. They petitioned again in a letter to HHS Secretary Kathleen Sebelius on October 5th, with support from their congresswoman, Rep. Debbie Wasserman Schultz, Florida Democrat, but have not heard back. So, on December 1st, barring an order by the federal Department of Health and Human Services, Mr. Pearl will lose his benefits.

The insurer also canceled similar policies in New Jersey and South Carolina, and earlier ceased offering any health plans in Colorado, but did not cancel all of the policies in every state in which they were offered, said John Fried, the Pearls’ attorney. The company took the action only against those plans where claims were highest, he said. In an e-mail to four other Guardian executives entered into evidence in the Pearls’ suit, company Vice President Tim Birely discussed how the company could “eliminate this entire block to get rid of the few dogs.” Wow. This reminds me of something I’ve heard before …. what is it? Oh yeah. Death Panels.

Guardian, a 150-year-old mutual company, reported profits of $437 million last year, a 50 percent increase over $292 million in 2007. It paid dividends of $723 million to shareholders and had $4.3 billion in capital reserves, according to its annual report. The company’s investment income totaled $1.5 billion that year, a small increase from the year earlier. They discontinued Ian Pearl’s coverage late last year, but were required by law to continue paying for his care for another year. Next year, without Mr. Pearl as a drag on their books, they will earn an extra one million dollars in profits.

Ian Pearl has Type II spinal muscular atrophy – which often kills victims in infancy. He grew to adulthood only to suffer respiratory arrest at 19. He has required a tracheal tube ever since. The Pearls moved to Fort Lauderdale 30 years ago because the humidity there is beneficial to their son. Warren Pearl has commuted back and forth from New York every weekend since to continue to operate his business. Ian became the first wheelchair-bound pupil to be mainstreamed in the Broward County elementary schools, and he was elected president of his high school class at University School of Nova Southeastern University in Fort Lauderdale.

As a last resort, Ian would be admitted to a state hospital under Medicaid. But the Pearls consider that a death sentence. “Ian would be lucky, or unlucky, to survive more than a matter of weeks or months,” Mrs. Pearl said. “One-on-one skilled nursing is essential.” Her husband, 60, a wealthy businessman, said the couple have enough savings to pay for their son’s care for a few years, and after that, they could mortgage the family’s home.

This is capitalism at its finest. The free market at work. And a perfect example of why the health and well-being of Americans should not be a part of that equation. Profit will always be the priority.

“This is a matter of life and death for my son,” Warren Pearl said. “I have to have faith that HHS will enforce the law. This is attempted murder, as far as I’m concerned. They targeted us, they never expected to get caught. I believe that justice will prevail.”

I hope your faith is justifed, Mr. Pearl.

David Perkins

Thanks to:
The Washington Times

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