UPDATE: Because of the huge public outcry, Blue Cross has backed off on the policy.

As I think I've pointed out before, most of the Blues are considered to be "non-profit" in order to get certain privileges. But they are usually just parent companies for dozens of for-profit subsidiaries - with whom they contract over-priced services to earn nice, hefty profits.

We can expect more abuses (and more price inflation) if the insurance exchange makes the same mistake and treats them as actual non-profits:

One of the worst abuses of the private insurance industry is known as recission, where insurers decide to revoke the coverage of their customers for frivolous reasons. The Los Angeles Times reports today that one of the nation’s largest insurers, Blue Cross of California, has “notified [its] policyholders” that their coverage could be “immediately dropped” if they miss even a single payment:

Amid a national debate on how to make the healthcare system friendlier and more accessible, and as millions of people grapple with the loss of jobs and homes, what does insurance heavyweight Blue Shield of California do? It decides to take a key benefit away.

The company has notified individual policyholders that their coverage could be immediately dropped if they miss a single payment — or so it seems. Blue Shield says in a letter to customers that they can reapply for insurance, but with potentially higher premiums and stricter conditions.

Thankfully, a California law that mandates minimum grace periods and a decision by the company that will allow for a 28-day grace period will keep Blue Cross from immediately dropping people from coverage, as their letter threatens. The LA Times goes on to note that the the company’s pronouncement comes “after last year’s announcement that Blue Shield and Anthem Blue Cross agreed to pay a total of $13 million in fines after cancelling the policies of more than 2,000 Californians after they became ill.”

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From Keith's post over at Daily KOS--Special Comment: Not Health, Not Care, Not Reform:

There could not be a finer line between the words compromise and compromised and tonight, with the greatest possible reluctance, I believe I have to go on the air and state my opinion that the Senate bill in its current form has clearly crossed that line and, as currently constituted, cannot be passed.

Seems he's as unhappy about the recent developments with this health care bill as many of us are.

Finally, as promised, a Special Comment on the latest version of H-R 35-90, the Senate Health Care Reform bill.

To again quote Churchill after Munich, as I did six nights ago on this program:

"I will begin by saying the most unpopular and most unwelcome thing: that we have sustained a total and unmitigated defeat, without a war."

Last night on this program Howard Dean said that with the appeasement of Mr. Lieberman of Connecticut by the abandonment of the Medicare Buy-in, he could no longer support H-R 35-90.

Dr. Dean's argument is informed, cogent, heart breaking, and unanswerable.

Seeking the least common denominator, Senator Reid has found it, especially the "least" part.

This is not health, this is not care, this is certainly not reform.

I bless the Sherrod Browns and Ron Wydens and Jay Rockefellers and Sheldon Whitehouses and Anthony Weiners and all the others who have fought for real reform and I bleed for the pain inflicted upon them and their hopes. They have done their jobs and served their nation.

But through circumstances beyond their control, they are now seeking to reanimate a corpse killed by the Republicans, and by a political game played in the Senate and in the White House by men and women who have now proved themselves poorly equipped for the fight.

The "men" of the current moment, have lost to the "mice" of history. They must now not make the defeat worse by passing a hollow shell of a bill just for the sake of a big-stage signing ceremony. This bill, slowly bled to death by the political equivalent of the leeches that were once thought state-of-the-art-medicine, is now little more than a series of microscopically minor tweaks of a system which is the real-life, here-and-now version, of the malarkey of the Town Hallers. The American Insurance Cartel is the Death Panel, and this Senate bill does nothing to destroy it. Nor even to satiate it.

It merely decrees that our underprivileged, our sick, our elderly, our middle class, can be fed into it, as human sacrifices to the great maw of corporate voraciousness, at a profit per victim of 10 cents on the dollar instead of the current 20.

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As a Californian, one of the enduring takeaways of the Schwarzenegger era is just how much latitude he is given on the national level as some kind of transformative post-partisan leader, when those same reporters know that California is crumbling into dust under, and in many cases because of, his leadership. We witnessed this again today as national media types heaped praise on the Governor issuing a letter about the Obama health care reform plan:

“As Governor, I have made significant efforts to advance health reform in California. As the Obama Administration was launching the current debate on health care reform, I hosted a bipartisan forum in our state because I believe in the vital importance of this issue, and that it should be addressed through bipartisan cooperation.

“Our principal goals, slowing the growth in costs, enhancing the quality of care delivered, improving the lives of individuals, and helping to ensure a strong economic recovery, are the same goals that the president is trying to achieve. I appreciate his partnership with the states and encourage our colleagues on both sides of the political aisle at the national level to move forward and accomplish these vital goals for the American people.”

I love the phrase "significant efforts," by the way. Others might call them "failed efforts," but YMMV.

But this "praise" for health care reform is just a piece of paper. One would think that the national media would seek to know the actions of the Governor on health care - one would be wrong, but one would still think that. And it would take about 10 seconds of Googling to figure out that the Governor has vetoed key elements of the legislation working through Congress. Last year he vetoed AB1945, which would have banned rescission, the insurance industry practice of dumping sick customers for technical violations on their applications like typos the moment that they try to use their policies for treatment. He vetoed SB840, the universal health care bill, on multiple occasions in the past. He vetoed SB1440, which would have mandated that insurance companies spend 85% of premiums on medical care. He vetoed SB973, which would have created a public insurance option by linking local and regional measures. He vetoed AB2, expanding the state's high-risk pool for people with pre-existing conditions.

He basically has vetoed many of the same provisions to be found in the current health care bill. And he is threatening to veto every bill on his desk this year, including another bill to ban rescissions so that customers who have paid insurance premiums for years aren't left to die when they want to use their policies. Anthony Wright notes some of the other bills:

* AB 119 (Jones): GENDER RATING, to prohibit insurers from charging different premium rates based on gender.

* AB 2 (De La Torre): INDEPENDENT REVIEW, to create an independent review process when an insurer wishes to rescind a consumer's health policy, create new standards and requirements for medical underwriting, and requires state review before plan approval. Also raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history.

* AB 98 (De La Torre): MATERNITY COVERAGE, to require all individual insurance policies to cover maternity services.

* AB 244 (Beall): MENTAL HEALTH PARITY, to require most health plans to provide coverage for all diagnosable mental illnesses.

Dan Walters, one of the few pundits left in the state, calls these bills "nothing of cosmic importance". Well sure, he's not going to have a kid, and women are charged more than men by insurance companies anyway! To an entitled white man with a good-paying job, he doesn't have to worry about losing his policy or not getting comprehensive medical coverage. But to a woman who can't afford to lose her job to have a baby, or someone with a mental health problem who can't get relief for his suffering, or someone with an individual policy living constantly in fear that his or her insurance will get revoked precisely when they need it, these are issues of "cosmic importance." Anyone saying otherwise is ignorant.

And yet the Governor will have no problem holding these bills, and these people, hostage. His buddies at the Chamber of Commerce probably don't want him to sign them at all. So he writes a pretty letter supporting health care reform, while denying the very same measures to his own constituents. And national media types call him a "bold leader."

Lovely. This is why we can't stop fighting:

(CN) - An insurance company's "reprehensible" decision to rescind a South Carolina man's coverage after he tested positive for HIV warrants a $10 million punitive damage award, the state Supreme Court ruled.

Jerome Mitchell applied for health insurance with Fortis Insurance Co. in 2001 at the age of 17. Fortis issued him a policy after he stated that he had never been treated for an immune deficiency.

One year later, Mitchell tried to donate blood to the Red Cross, which informed Mitchell that he was HIV-positive. Mitchell's doctor confirmed this finding.

Fortis investigated Mitchell's medical history and rescinded his policy, stating that Mitchell had misrepresented his HIV-positive status.

Mitchell sued for breach of contract and bad faith and presented evidence that he would die of AIDS within four years without medical treatment.

The trial court ruled in Mitchell's favor, awarding him $186,000 in actual damages and $15 million in punitive damages.

The state high court upheld the awards, but reduced the punitive damage award to $10 million based on the ratio of the projected $1 million cost of Mitchell's treatment.

"We find ample support in the record that Fortis' conduct was reprehensible ... Fortis demonstrated an indifference to Mitchell's life and a reckless disregard to his health and safety," Justice Toal wrote.

(I have been doing some work as a blogger fellow with Brave New Films on their Sick For Profit campaign. Visit us on Facebook.)

Today Brave New Films released their second installment in the Sick For Profit series, taking a look at the corrupt practices of CIGNA, denying care to their customers while their lead executives rake in millions and lead lavish lifestyles.

Meet Jo Joshua Godfrey. She had cancer without knowing for over a year.

"I would go to CIGNA and they would tell me I had bronchitis and give me medicine and send me home. No matter what medicine they gave me I wouldn't get better. Then the CIGNA Director called me up and she told me that there was nothing wrong with me at all. I called the doctor, and I came with my film and my CAT scan and he just put it in, it took exactly thirty seconds. He told me, 'You have cancer,' and he said the reason CIGNA did not want to give you your records is they've known right way back for years that you have cancer and they're not going to treat you."

CIGNA took in $19.1 billion dollars in revenue last year, with a $292 million dollar income. That doesn't include the salaries given to people like CEO Ed Hanway. He made a cool $12 million last year, and over the past five years he took in $120 million. Hanway has $28 million in unexcercised stock options. The company corporate jets, also not seen in profit statements, cost $68 million. This money is gained, as former communications director Wendell Potter says in this video, through denying claims and dumping the sick, enhancing the value of the company for Wall Street investors. The effect on people's lives, meanwhile, is tragic. Nataline Sarkysian, featured in the Americans United For Change advertisement, lost her life after CIGNA repeated denied her a liver transplant, despite the family having full coverage.

Meet Stephen Coddington, the wife of Marian, a stroke victim:

The case manager at the nursing home called me in and was really upset, and she said, "CIGNA is wanting to discontinue therapy with her. The doctors called and appeals were denied." It has been a day-in and day-out fight. Every talk that I've had with them, it's been, how can we wiggle off this hook.

This is the human cost for an insurance company's existence, for the record profits and supreme lifestyle of their executives. Welcome to the American health insurance industry. Instead of helping policyholders attain the health security they need for their families, big insurance companies get rich by denying coverage to patients. Now they're sending lobbyists to Washington, DC to twist the arms of lawmakers to oppose reform of the status quo. Why? Because the status quo pays.

CIGNA is not a special case in the insurance industry. It's perfectly normal and expected for a corporation to maximize profits. The difference with insurance is that the profit comes at the expense of your well-being, and frankly, all the regulations in the world won't substantively change that. The best way to fight back is through exposure, a juxtaposition of the human luxury paid for by human misery.

So help us shine this spotlight. CIGNA's advertising tagline is 'A Business of Caring.' We think they ought to come up with something more appropriate for their actual practices. If you come up with one, post it on our Facebook page. Here are some examples. We'll send the best over to CIGNA. In addition, Jo Joshua Godfrey will join SEIU Healthcare 775NW outside the CIGNA corporate offices in Seattle, Washington today as they demand quality and affordable health care for every American as a fundamental right and not a privilege.

And send this video to your friends. Everyone needs to know what's at stake in health care reform. This kind of denial of coverage can happen to anyone under the current system.