HEALTH CARE/Joan Retsinas

Annals of Greed, Continued

The Annals of Greed continues to astound, with ingenious twists. Here is one above the ho-hum.

We already recognize the garden-variety scams where tricksters use gullible patients as dupes: the physicians who bill for non-existent services, the medical equipment companies that send wheelchairs to anybody who clicks on the correct box, the “Medicaid” mills that treat more patients daily than an honest clinic could treat in a week. The government regularly prosecutes these ho-hum efforts. We know too about insurance policies that promise a lot, but deliver far less, though the Affordable Care Act has tried to tamp down on those. And we delete the internet solicitations that promise us our heart’s desire, if only we yield up our social security numbers – a sure route to losing our “identities” in cyberspace.

Yet one scam from North Carolina merits mention in the Annals of Greed. Why not combine the destitute homeless, legitimate health insurance policies, and a state’s “Medicaid gap” into one gloriously inventive fraud? (“Charlotte Broker Gets Federal Insurance Subsidies For Hundreds Of Homeless People, Raising Legal, Ethical Questions,”Ann Doss Helms, Charlotte Observer, June 30, 2015)

North Carolina is one of the states that did not expand Medicaid. The Affordable Care Act gave states generous subsidies to bolster Medicaid. Indeed, the architects of the Act presumed that states would comply, leaving the subsidies for everybody else. Yet, true to conservative principles, 21 states, including North Carolina, said “No.”

That “No” left many North Carolinians in an insurance limbo: ineligible for Medicaid, yet too poor for the subsidies offered under the Affordable Care Act for traditional policies. A slew of North Carolinians woke up, post Obamacare, to discover that, insurance-wise, they fell into a gap. They were uninsured before the Act, and uninsured afterward too.

One savvy trickster to the rescue – though this trickster didn’t reach out to the working people who fell into the gap – the waitresses, truck drivers, farmers, or “independent contractors” (a euphemism). They were not reliably gullible enough for a scam: many had been uninsured forever, took that for granted, distrusted offers of nirvana. Fatalists, many accepted “uninsured” as their inevitable lot.

Homeless people, though, were a ripe target. They presented a litany of ills. Some were addicts; some were mentally ill; some had fled domestic violence; some had been unemployed for years; some suffered from a cascade of bad-luck mishaps – the fuel for fatalist tragedies. Whatever the individual’s past, all focused in the present on shelter and food. If they wanted medical attention, they went to a hospital emergency room.

But if these people could show an annual income of $11,700, they would be eligible for a full subsidy for a plan – admittedly, one with a high-deductible and office co-pays. But still, only $11,700 would bring the homeless to that threshold. A creative insurance agent saw the solution: amass all the non-cash, non-legitimate payments. Consider income from prostitution, from panhandling, from petty thefts. Consider the in-kind contributions – free food, free shelter, free clothing. The fine print of the Affordable Care Act allows for non-traditional sources of income. Find sources to raise the homeless to a plausible $11,700 threshold.

Then “sell” them a policy – more accurately, fill out the paperwork to get them a “bronze” policy, one that demands no monthly premiums, but has a $5,000 deductible and $15-20 co-payments for office visits. Uncle Sam will pay the whole tab, because the enrollee is eligible for the full subsidy. Maybe give the enrollee (or a middle-man recruiter) a $5 “incentive” to yield up name and social security number.

The insurance company gets an enrollee – indeed, one that, regardless of how ill s/he may be, will cost the insurer little. The only predictable expense for the insurer: preventive care visits, including vaccinations. After that, the insurance company will pay out nothing: the $5,000 deductible, and $15-20 co-payment for office visits will guarantee that the enrollee will not draw upon the policy. The company wins.

The agent too wins. He gets a commission, based on the number of enrollees. Investigators tabulated this agent’s take at roughly $9,000 a month. (For tricksters eager to emulate this scam, a tip: recruit at homeless shelters and soup kitchens.)

As for the homeless enrollees, they get a policy that is useless. The patients will once again end up in a hospital emergency room. (Unless the hospital creates a legal way to pay the patient’s deductible, the hospital will again be left with a loss.)

Indeed, cruelly, the homeless enrollees end up worse off. Since the homeless who yielded up their social security numbers for this scam are technically “insured,” they are no longer eligible for the free medical care, including medications, that North Carolina offers to indigent uninsured people. The homeless end up in more desperate straits.

And the ultimate dupe? The taxpayers. They, who paid for this scam, could have legitimately insured the homeless via Medicaid.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email

From The Progressive Populist, September 1, 2015

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