Archive for the ‘Business Insurance’ Category

Service of Insurance: What it Pays For, Making Coverage Easier and When a Company Should Consider Ducking Coverage

Monday, October 28th, 2019

Photo: aiche.org

If I had back all the premiums I’ve paid for everything from renter’s and owner’s to car, life and health–even Social Security–insurance I’d be a wealthy woman as many would be. I admit that when I’ve needed it, I was grateful for the coverage.

For humanitarian reasons I question how insurance companies can get away with not covering a sick person for lifesaving medication and related legitimate health expenses. Drugs that aren’t on approved lists aren’t covered nor is unlimited home health care which is cheaper and in most cases far better than carting off a person to a nursing home. In this post I write about a pharmaceutical company that’s addressing how to help insurance companies pay for a pricey drug.

I also question whether an insurance company should have to pay an organization’s settlement and legal expenses in cases of abuse. The exception would be legal expenses. They should pay them if the accusations prove false.

Medical

Here’s a creative way that pharmaceutical company Novartis is helping insurance companies pay for Zolgensma, the most expensive drug in the world. I first read about it this summer in a Wall Street Journal [WSJ] article by Denise Roland, “Insurers Limit Access to $2 Million Drug.” One dose of the innovative gene therapy helps prevent a rare condition in young children from getting worse.

They are born without a gene that controls the muscles that allow them to sit up and later, stand on their own. When this article was written, insurance companies were reluctant to spring for the money to pay for the one injection because they weren’t sure it would work. It is meant to halt the progression of the disease, it doesn’t reverse or cure it. It is most effective when given in infancy, before symptoms appear.

Photo: zolbensma.com

Things have changed since summer. Recently Novartis made concessions to help patients acquire the drug. Denise Roland and  Carlo Martuscelli explained the company’s compromises in the WSJ article “Novartis Lauds Launch of World’s Most Expensive Drug.”

Novartis agreed to refund some of the cost to the insurance company if the drug didn’t work. It also offered to divide the cost evenly over five years [though few insurers have opted for this choice]. Sales of $160,000 in the first three months have exceeded analyst expectations. CEO Vas Narasimhan “said on a call with reporters that 99 percent of patients who were eligible for Zolgensma were receiving it, although some must go through an appeal process to do so.” Regardless, Narasimhan said patients “on average” received the drug within 30 days of requesting it.

Insuring Abuse

On the other hand I wonder how some insurance customers think that they should collect and why a company should pay them.

The title of a recent WSJ article by Nicole Friedman and Ian Lovett was: “Insurers Face Wave of Costly Child Sex-Abuse Claims–As 22 states move to ease victims’ pursuit of damages against alleged abusers, disputes over decades-old policies loom.” In New York, the Child Victims Act gives victims a year to report abuse with no time limits.

Photo: correllfirm.com

The reporters wrote: “Most of these institutions, such as churches or schools, are expected to try to use liability insurance to cover some of the cost of defending against these lawsuits and paying potential damages.” They continued ” The legal disputes underscore the complexity of litigating decades-old claims and the uncertainty about how much money will ultimately be available to compensate victims.” It could be $billions they estimated.

According to them insurance companies have already paid 20 to 80 percent of settlements for victims against churches. [The New York Archdiocese has been compensated in one or another way since 1954.]

Photo: businessinsurance.com

As the statute of limitations kicked in, insurers calculated what their exposure would be. Now that it has been lifted for a year, those calculations are out the window and exposure to compensation has increased, but not without complications. “Many institutions and insurers don’t hold on to decades-old policy documents, and it can be difficult to track down details. Sometimes ‘insurance archaeologists’ are hired to hunt down evidence of old policies,” Friedman and Lovett reported.

They identified additional reasons to derail compensation: Did the policyholder know about the alleged abuse? “Liability insurance policies typically cover negligent acts but not intentional ones.” And should a claim cover one alleged abuser or each of his victims?

Do you agree that health insurers/Rx plans should cover costs for medicine, generic if necessary–even expensive experimental drugs?

What about an institution with a sexual predator among its employees?  Should court or settlement costs be eligible for insurance coverage if the person is proved guilty? Wouldn’t this be like my buying insurance to cover my legal and bond costs were I to be accused of robbing a bank?

Photo: witc.edu

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