Why Should We Protect the Private Health Insurance Industry?

Republicans have turn the fight against the public option into a battle cry for the health insurance industry. Rep. Paul Ryan (R-WI) made this very argument.

"A new government-run plan would stack the deck against any would-be competitors. The private sector has to pay taxes; the government collects taxes. The private sector has to account for its employees and benefits, while maintaining minimum reserve requirements; the government does not. The private sector pays whatever rates it negotiates with providers; the government dictates payments."

Ryan and other Republicans seem intent on protecting insurance companies. Unfortunately, their time would be better spent protecting the public from private health insurance fraud. Florida CFO Alex Sink recently took action against companies selling unauthorized health insurance.

TALLAHASSEE—Florida CFO Alex Sink announced today that she has filed an Immediate Final Order (IFO) against Depawix Health Resources, Inc., Peck & Peck, Inc. (also known as Green Cross Managed Health System), and Smart Service, Inc. for soliciting and selling unauthorized health insurance in Florida. It is suspected that nearly 300 Floridians may have bought coverage from these Georgia-based entities. An investigation by CFO Sink’s Division of Agent and Agency Services revealed that the insurance was sold by both licensed and unlicensed individuals.

“Unauthorized health insurance can lead to serious financial hardship for Floridians, which is why Florida’s licensed agents should be vigilant about protecting consumers from this type of scam,” said CFO Sink. “We will take the most aggressive action possible against anyone who sold these unauthorized products and put Floridians at risk.”

Licensed insurers have met Florida’s stringent statutory financial requirements for licensure, and policyholders are protected by the Florida Life and Health Guaranty Association Act should a licensed insurer become insolvent. Unauthorized insurance does not offer these protections. Unauthorized insurance, particularly unauthorized health insurance, can lead to significant unpaid claims and out-of-pocket costs for victims. Agents or individuals who sell unauthorized insurance not only could lose their license but also could be required to pay all unpaid claims and could face felony charges.

CFO Sink has an ongoing campaign to warn consumers to “Verify Before You Buy,” offering easy-to-use links on her web site for consumers to check if a company or agent is licensed in Florida. Consumers and agents can verify licensure by going to www.MyFloridaCFO.com. Complaints about suspected unauthorized insurance can be reported on the web site or by calling 1-850-413-3089 or toll-free at 1-877-My-FL-CFO.

The fact that legal prosecution isn't persued against these companies is criminal. The health insurance industry sells bogus coverage and goes through great lengths to not make payments. The American people should be furious. Instead, tea baggers have defended the private insurance industry at townhall meetings.

Rob Piccirillo once operated the Florida Insurance Agency. He explained how the scam worked it's way down from the top.

I witnessed agency owners and mid-level managers conning their agents into believing they were doing the right thing by their clients. I saw beneficiaries bamboozled by those who lied to them, telling them they would receive extra benefits by signing their names onto forms that would switch their doctors and deny them coverage! I understand the way health insurance agencies are organized and managed like a true pyramid scheme, and how political it can be, i.e. the conducting of backroom deals with executives of health care facilities to attain access to leads.

Joe Scarborough's conservative idealogy will not allow him to back a public health care public health insurance option. Rep. Anthony Weiner told Scarborough insurance companies don't do check-ups operations and other forms of medical care. Weiner asked Scarborough what is the value of the private insurance companies. Scarborough could not provide an answer.