Awhile back I wrote, trying to figure out how my adopted parasite had managed to have a better-than-(Wall-Street)-expected first quarter:

I have tried, and failed, to understand or find out what "disciplined pricing and operating improvements in senior and local group businesses and more favorable prior-period claims development" means. I'm especially curious about that "more favorable prior-period claims development" part. Sounds suspiciously like not paying old claims, to me. But you know how I am...

Dearie me, not suspicious enough, perhaps. Could this be part of what it means?

WP: I can’t recall a reporter ever probing how insurers manage to meet Wall Street’s expectations through medical management and claims practices, which are key ways to manipulate the medical loss ratio and dump unprofitable accounts. Not once was I asked by a reporter what happens to people who work for small and mid-sized companies that get “purged” by insurers because their employees’ claims were causing the insurer’s medical loss ratio to move in the wrong direction from an investor’s point of view. No one ever asked me about the human consequences of satisfying Wall Street. Most reporters are happy to do a superficial job.

TL: How do companies manipulate the medical loss ratio?

WP: They look at expensive claims of workers in small businesses who are insured by the company, and the claims of people in the individual market. If an employer-customer has an employee or two who has a chronic illness or needs expensive care, the claims for the employee will likely trigger a review. Common industry practice is to increase premiums so high that when such accounts come up for renewal, the employer has no choice but to reduce benefits, shop for another carrier, or stop offering benefits entirely. More and more have opted for the last alternative.

TL: What tactics do they use in the individual market?

WP: They rescind policies when a review indicates that an individual has filed a lot of expensive claims. They will look for conditions that were not disclosed on the application. Often the policy likely will be canceled and the individual left without coverage. Sometimes people aren’t aware that they have a pre-existing condition. It might be listed in the doctor’s notes but not discussed with the patient.

This is part of an interview with Wendell Potter, a former head of corporate communications for CIGNA, in the Columbia Journalism Review. Here is his bio at the Center for Media and Democracy, and more on his blog about why he left CIGNA and is now doing what he's doing. Mr. Potter testified this afternoon before the Senate Commerce committee. See here. [I'm looking for a good account of his testimony.]

Remind me again why we want to leave these people parasites in charge of any part of our health-care delivery system?

[hat tip Susie]

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Edited to add: This shows very clearly a big reason that single-payer is preferable: when people are insured as individuals or small groups, they will not always fit the actuarial statistics used to set the price of their insurance (premiums, deductables, copayments). It is only over large groups that these things "average out". What the insurance companies are doing is, in effect, taking an average over all people "like you" in some statistical sense to set your individual price (or "like your group" if you are a group) - and then trying to get rid of the ones who turn out to need more expenditures than average, while (of course) keeping the ones who turn out to be less expensive than average.

It is, in a word, evil, and the very opposite of what insurance is supposedly meant to do for us, the insured. (But of course they aren't doing it for us: they're doing it for Wall Street.)

This is why we need one big pool of insureds, everyone in, nobody out.