When I think of a publicly traded health insurance companu the forts thought that comes to mindis, no one can serve two masters. If anyone needs to serve two masters at a time, he will love one master and hate the other. But Health insurance companies have convinced the public that they can serve two masters successfully for several years. They assure that they can deliver quality care to their customers, while generating profits to their shareholders. However, people are now recognizing that it is impossible to serve two masters. They want to know which master do insurance companies really serve- the policyholders or the shareholders.
Health insurance is the norm for an average American citizen. The cost of health care is on the raise and only a few individuals can avail the essential health care without insurance. But most of the insurance companies endeavor to provide reduced quality care to the patients. They are hiding behind ERISA and try to protect themselves from claims.
Though the insurance companies protest that they perform their duty toward policyholder and shareholder better, they have selected which master they would serve. It is obvious that the master is not the policyholder. In order to prove that they are offering priority to their policyholders, they end up doing disservice to their shareholders. Therefore, they are not faithful to both policyholders and shareholders.
The ability of health insurance companies to conceal behind ERISA came to an end, when the Supreme Court decided to reduce the protection of the insurance companies from litigation. In the Case of Pegram vs. Herdich, the Supreme Court specified that the ERISA MCO protects from liability while making an eligibility decision, but it does not protect from liability while making a medical treatment decision. The judgment clearly specifies that the health insurance company can deny coverage, only if the policy explicitly states that the coverage is not included in that plan. If the coverage is denied for any other reason, it really means that the insurance company is breaching a fiduciary duty.
The health insurance company can be held liable for breach of duty. They are responsible to report the Securities and Exchange Commission about their duty to the policyholders along with the report to the shareholders. The investors of a insurance company need to be reminded that the insurance company is not a commercial product manufacturing company and they can be in business as long as they owe quality care to their customers.
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