Is impoverishment of policyholders by insurance companies standard operating procedure?

Supplementary Security Income (SSI) under the Social Security Administration (SSA) is a Federal program to assist disabled people. In the State of North Carolina, SSI eligibility implies automatic eligibility for Medicaid. This is not necessarily true in other States since Medicaid is a program administered by the State. By accepting medical assistance under Medicaid one must understand and agree to certain provisions regarding income, the supplying of information and conditions of reayment to the State.

The following is an exact quote from just such an agreement that is a North Carolina State form: Form DMA-5008 (1/95), whose title is "VERIFICATION/ELIGIBILITY DETERMINATION FOR MEDICAL ASSISTANCE APPLICATIONS".

I understand that by accepting medical assistance under any aid/program category, I agree to give back to the State any and all money that is received by me or anyone listed on this application from any insurance company for payment of medical and/or hospital bills for which the medical assistance program has or will make payment. In addition, I agree that all medical payments or medical support paid or owed due to a court order for me or anyone listed on this application must be sent to the State to repay past or current medical expenses paid by the State. This includes insurance settlements resulting from an accident. I further agree to notify the county department of social services if I or anyone listed on this application is involved in any accident.

The impoverishment of policyholders by insurance companies is clearly so prevalent that an official State form has been designed to cover the situation. It cannot be an accidental or occasional occurrence. The existence of this paragraph is, if not absolute proof, is a very strong indication that it is standard operating procedure for insurance companies generally to impoverish their policy holders. This is an indirect but clear indication of a priori intent to defraud by insurance companies, their executives and management. Note that the wording of the paragraph implies health insurers first and also includes automobile insurers; no particular type of insurance is singled out. No particular insurer is singled out. This happens then to be the legal criterion for a collusion of racketeering among all the companies of the entire insurance industry.

It is possible, of course, to read this as merely a State having a legal clause to prevent people from getting "the same benefits twice", once from Medicaid and again from their insurance company. The question remains, however, why are so many people who are supposed to be covered by insurance for which they have paid, so financially reduced that they qualify for Medicaid in the first place?

I would very much like to hear from anyone, in other States who has access to a similar document of agreement, regarding the existence of paragraphs similar to that above. If you can quote the paragraph, cite the form and its title, and email to me, I will put the information on this page.

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Created: June 27, 1998
Last Updated: May 28, 2000