Saturday, October 21, 2006

Three L.A. Times Articles On Insurance Worthy of Commendation

In my experience as a reporter, no industry qualified as "bad guys" more than the insurance industry. This is a profession which all too frequently fails to uphold its duties to its customers as a priority, but instead grasps for every excuse it can find not to pay claims. Through fine print in contracts that few read and even fewer understand, it finds its excuses not to pay, and through powerful lobbying efforts with corrupt officials, it protects itself with favorable laws.

It is all the more heartening then to find, in reading back issues of the L.A. Times for last weekend upon returning from my trip to New England, that in three separate articles, Times writers take on this squalid business.

The best of the articles came on the front page of Saturday, Oct. 14, when Molly Selvin raised a host of questions about long term care insurance, which is very heavily advertised to seniors, but has a bad record of finding excuses not to pay many large and long lasting claims.

Selvin dealt with egregious examples of policyholders not getting the benefits they had paid for, and certainly deserved. But she also showed how the immense liabilities of the insurers over the years to come make it unlikely they will have the wherewithal to pay all legitimate claims, even if they have the desire to.

The same day, the able Lisa Girion in the Business section resumed her occasional series on the derelictions of the highly profitable Blue Cross of California, a medical insurer.

Blue Cross has been cancelling many individual policyholders who make high claims, and, at long last, the state is coming after it on a few of these cancellations. But hospitals are also suing Blue Cross for approving medical care and then failing to pay the benefits, leaving poor Californians in the lurch with huge hospital bills.

A few days after this article appeared, Blue Cross did agree to settle a number of cases. Perhaps, the Girion articles on the insurer (Saturday's was not the first) assisted in achieving this result.

A confession is in order here. I carry Blue Cross as my medigap insurance, and my own experience with the company has been a good one. But when I wrote a Times consumer column, I found, like Girion has, that Blue Cross is by no means always scrupulous in the way it does business. It certainly deserves the critical scrutiny she has given it, and there is no question but that, since this company does have the resources to be honest, her articles may well have done some good.

On Sunday, Oct. 15, the Times Travel section had an extremely useful article, in the meantime, by James Gilden, on alleged fraud by Trip Assured, a Tennessee-based company which has failed to pay on legitimate travel insurance claims, often finding the most spurious excuses not to do so.

John Garamendi, California's outgoing insurance commissioner, who is now running for lieutenant governor, has now banned Trip Assured from doing business in California. Gilden quotes him as explaining, "This company's whole reason for being appears to be to defraud and intimidate senior citizens." Several other states have also banned Trip Assured.

All three of these articles do a public service, and the Times, with some exceptions such as Peter Nicholas' recent sometimes-misleading article on the insurance lobby's influence over Gov. Arnold Schwarzenegger, continues to do well in this area.

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It was not about insurance, but Rosemary McClure's lead article in the Oct. 15 Travel section critiquing a tour she took of New England with the Trafalgar company also was a public service. The Times travel section under the late, often-admired editor, Jerry Hulse, seldom did this kind of article, and we ought to see ever more of them.

McClure fairly lays out many shortcomings in the Trafalgar tour. There are good companies out there, and it would also be appropriate to review some of them.

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