Insurers being fined for numerous violations across the country goes unreported by the media.

Since you likely don’t pay as much attention to the behavior of insurance companies as I do, you probably are not aware that CIGNA, my last employer, was fined $600,000 by the North Carolina Department of Insurance earlier this week for, among other things, not charging its customers correctly.

In addition to the fine CIGNA has been ordered to pay, the company will have to shell out several hundred thousand dollars in refunds to North Carolina employers whom regulators say were charged too much over a three-year period.

It was the second largest fine ever levied by the state’s regulators, the largest being a $1.8 million fine in 2003 against Blue Cross Blue Shield of North Carolina for underpaying claims for emergency care. The news about the CIGNA fine was picked up by a few media outlets in the state, but not many. And it got almost no press coverage outside of the state.

That didn’t surprise me. Having served as head of PR for two of the country’s largest health insurers — CIGNA and Humana — I know from personal experience that such fines are not widely considered newsworthy.

Insurers know too that most state regulatory agencies are not sufficiently resourced to effectively monitor their behavior, although the main responsibility of state insurance departments is actually to protect the interests of consumers against predatory practices. Because of this often-inadequate oversight, insurers realize that the chances of getting caught are, in many states, pretty slim. And they consider the infrequent and inconsequential fines they have to pay when they do get caught just another cost of doing business. Considering that the five largest health insurers made a combined $11.7 billion in profits last year, the fines are little more than chump change.


Link: http://www.publicintegrity.org/articles/entry/3094/