ABC-TV World News Tonight
PETER JENNINGS, anchor:
Most Americans depend on their employers for health insurance. Some small businesses cannot afford traditional insurance. And with special insurers come special risks. In the 1990s they failed to pay medical bills for more than half a million employees who were left owing hundreds of millions of dollars to their doctors. Here’s ABC’s Judy Muller.
JUDY MULLER reporting: (VO) Sixty-four-year-old Christine Sinclair (ph) has inoperable cancer.
Dr. EDWARD ALEXSON (Sinclair’s Oncologist): Any cough or congestion? Nothing of that sort?
MULLER: (VO) Her chemotherapy cost about $2000 a week. For months, she assumed that her insurance was covering it.
Ms. CHRISTINE SINCLAIR: For every procedure you do you have to get permission from the insurance company to do it. And they were giving me permission but not paying the bills.
MULLER: (VO) She found out the insurance company was failing to pay when the doctor told her she owed more than $30,000.
Dr. ALEXSON: We’re not able to be the bank, so to speak, for all the people we take care of.
Ms. SINCLAIR: I felt like dying, I was so embarrassed. I was so embarrassed. And I was very worried that he wasn’t going to treat me anymore.
MULLER: Sinclair was not the only person left in the lurch. Other members of her small freelance writers union also reported problems.
Mr. AL WEINRUB (National Writers’ Union): Members started to get the royal runaround, you know, the wrong number, no cards, no description of the plan.
MULLER: (VO) The union had contracted with Employer’s Mutual, a company known as a MEWA, a Multiple Employer Welfare Arrangement. MEWAs offer health insurance to groups of small businesses that could not afford it on their own.
Mr. WEINRUB: The big insurers wouldn’t cover us because they’re not going to make enough money. So now we’re prey to these other vultures that come along and they say, ‘OK, well, we’ll just take your money and give you absolutely nothing and then run off with it.’
MULLER: Some three million Americans are covered by MEWA plans. When operated by legitimate brokers they can be very effective in providing low-cost health insurance. But since they are not traditional insurance companies, they’re not monitored by the government, and that makes them fertile ground for scam artists.
Mr. JAMIE COURT (Consumerwatchdog.com): State government’s not watching, and the Department of Labor really isn’t set up to watch where the money goes or if the money even stays in that pot.
MULLER: (VO) The executives at Employer’s Mutual are now under federal indictment charged with collecting $14 million, paying out only $3 million in claims and pocketing the rest. But it is not the only MEWA in trouble, and fraud is not the only cause.
Mr. COURT: Mismanagement, greed, in some cases, just the fact that that money is being invested on Wall Street.
MULLER: (VO) As for Christine Sinclair, she’s found another plan willing to take her at a much higher premium. But she is struggling to pay off $50,000 in past due bills.
Ms. SINCLAIR: I always thought that if you had insurance that was it, you didn’t have to worry about it anymore.
MULLER: (VO) And struggling to understand why this happened in the first place. Judy Muller, ABC News, Los Angeles.
JENNINGS: When we come back, our final item in the broadcast tonight, when a child is not simply a child and other absurdities of the tax bill.
TEXT: 75% of taxpayers will get a refund. Average refund $2,154