This recent story from the Associated Press demonstrates why doctors should dictate care and not insurers.
Former marine and paraplegic Thomas Nickerson was admitted to the V.A. Hospital in Long Beach, CA after falling off a handicamp ramp while attempting to enter his van and breaking his leg in two places. The doctors determined he needed to stay 109 days for treatment and rehab. Nickerson’s accident indemnity policy through Stonebridge Insurance guaranteed him a daily payment of $350 to cover non-medical expenses. However, after just nineteen days the company cut off the payments. Stonebridge claimed that any further stay at the hospital was medically unnecessary – despite what the actual doctors were saying – and therefore not covered. Nickerson sued Stonebridge and the case ended up in trial. After less than two hours of deliberation, jurors awarded Nickerson $35,000 for pain and suffering and punitive damages of $19 million! Stonebridge says it will appeal. Had the company done the right thing and followed through on its policy commitment to Nickerson, the total cost would have been $38,150.
Incidents of insurers unfairly denying claims are commonplace. Unfortunately, stories of redemption like Thomas Nickerson’s are rare. In many cases, insurance companies get away with unscrupulous practices. Under the current law in Oregon, insurers enjoy fairly lax oversight and consumers have few tools to rectify unfair denials. We posted recently on the case of a woman whose benefits were denied on the ridiculous basis that she was no longer alive. Even after acknowledging the mistake, the company still denied the claim. The Oregon Legislature is considering a bill (SB 719) that would hold insurance companies accountable for unreasonable and unfair denial of claims by placing them under the auspices of Oregon’s Unfair Trade Practices Act. This bill would not only give consumers much needed private remedies but would also give the Attorney General power to hold the worst offenders accountable.
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