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CNN story: What in the heck was Blue Cross Blue Shield of NC thinking?

In case you missed it, reporter Wayne Drash of CNN had a powerful and disturbing story yesterday about Blue Cross Blue Shield of North Carolina (BCBSNC) and the mad vagaries of America’s private health insurance regime.

In “Insurer sent $33,000 to a man struggling with addiction. He used the cash to go on a binge — and died,” Drash tells the tragic story of an North Carolina man named Joseph Hockett II. According to the story, Hockett was a troubled 29 year old who had long struggled with addiction issues, but who had gotten enrolled in health insurance with his mother’s help in order to comply with the mandate of the Affordable Care Act.

Sometime after obtaining coverage, Hockett was attacked in a violent bar fight and incurred several thousand dollars in out-of-network emergency care medical bills. Rather, however, than paying the provider directly, BCBSNC sent a huge check to Hockett in the amount of $33,399.76. Hockett then used the cash — much more than he made in a year as a DJ in bars and strip clubs — to go on a bender which resulted in death by overdose from cocaine and heroin. This is from the story:

[Hockett’s mother, Jennifer] Alba reached out to CNN after reading a recent story detailing how Anthem and its Blue Cross entities send checks to patients for out-of-network care instead of reimbursing the providers directly.
Another woman told CNN that a family member received a check for more than $240,000 after out-of-network surgery. The practice has forced some providers to sue patients to recover the money.
Critics say it’s a tactic insurers use to pressure providers into joining their networks and accepting lower payments — one that puts patients in the middle of the fight by sending money straight to them.
The insurance industry says the policy is designed to protect patients from surprise bills and exorbitant charges from out-of-network doctors and hospitals.

All told, BCBSNC sent Hockett more than $56,000 according to Alba. She says this took place even though the insurer knew her son had an addiction problem.

A BCBSNC spokesman told CNN that the insurer only sends cash to the insured when it can’t negotiate an agreed upon payment with the health provider, but Cody Hand of the N.C. Healthcare Association (a hospital trade group) disputed that claim. Hand told CNN that “Blue Cross is using the patients as a bargaining chip.”

Whichever explanation of the BCBSNC payments to Hockett is truly accurate means little in the real world, of course. Jennifer Alba’s son was caught in the middle of a battle between an insurer and a healthcare provider and is dead because of the payments — cash she told CNN was “dirty money.” What’s more, it’s clear that Hockett is far from the only person to find himself in such terrible situation.

The bottom line: It’s hard to see the Hockett tragedy as anything other than yet another powerful indictment of what is — even for “nonprofits” like BCBSNC — an utterly absurd health care system that continues to value profits and massive salaries for physicians and insurance company execs over the lives of people. If you doubt this, spend a little time today contemplating how you could possibly make sense of the Hockett tragedy to the resident of a modern nation with universal health care like Canada, Germany or Australia.

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