President Obama used his weekly address yesterday to "debunk[] some of the more outrageous myths circulating on the
internet, on cable TV, and repeated at some town halls across this
country." If we're clearing the air of falsehoods related to health care, then there is one story in particular that the President himself has referred to on a number of occasions that he should have corrected. That is the story of an Illinois businessman named Otto Raddatz.
At a town hall forum in New Hampshire on August 11, referring to Mr. Raddatz, President Obama said:
"Another [man] lost his coverage in the middle of chemotherapy because the
insurance company discovered he had gall stones that he hadn't known
about when he applied for insurance. Now, that is wrong, and that will
change when we pass health care reform. That is going to be a priority."
A few days later at a town hall in Montana, the President repeated this story.
"One man from Illinois lost his coverage in the middle of chemotherapy
because his insurer discovered he hadn't reported gall stones he didn't
know about. True story. Because his treatment was delayed, he died. "
And on August 15, Obama penned an op-ed in the New York Times titled, "Why We Need Health Care Reform" where he repeated the story for a third time.
"A man lost his health coverage in the middle of chemotherapy because
the insurance company discovered that he had gallstones, which he
hadn’t known about when he applied for his policy. Because his
treatment was delayed, he died."
The story the President relates of this innocent person who played by the rules and maintained insurance only to have it fail him in his time of a need is indeed a powerful, persuasive story ... except that it's not entirely true.
Here's the true story, based on testimony from Mr. Raddatz's sister at a hearing before the House of Representatives' on June 16, 2009.
Mr. Raddatz was a restaurant owner in Illinois who purchased an individual insurance policy for himself and his wife in 2003. On the original insurance application, he indicated that he had a history of kidney stones and was a smoker. A year into the policy, at the age of 59, Mr. Raddatz found himself losing weight rapidly and sought medical attention. It was then that he was diagnosed with stage four non-Hodgkins type lymphoma, a cancer of the immune system. After undergoing a series of chemotherapy and drug treatments, he was referred to a specialist for high-dose chemotherapy and a stem cell transplant.
At that time, he was informed by his insurer that his insurance was being cancelled due to his failure to disclose material information about his medical history - namely that he had a history of gall stones and an aneurysm. As it turns out, Mr. Raddatz was unaware of this diagnosis, having never been given the test results this information came from.
This happened just as Mr. Raddatz was told that he only had a 3-4 week window in which to get the stem cell transplant he needed. With his insurance rescinded, he could not afford to pay for the procedure out-of-pocket. His sister, Peggy Raddatz, reached out to the Illinois Attorney General's office who reviewed the situation and sent two letters to the insurance company arguing that Mr. Raddatz had not lied to the insurance company since he had been unaware of the test results and had in fact, never received any treatment for either of those issues.
The insurance company reinstated his insurance policy. He went on to receive the stem cell transplant, "which was extremely successfully" and enabled him to live for three and a half more years. He passed away when, while being scheduled to have a second transplant, his donor suddenly died.
Now in President Obama's version of the story, Mr. Raddatz died because his treatment was delayed. That is a lie. Mr. Raddatz's story is powerful in terms of illustrating problems with the insurance industry. It is particularly relevant that he was self-insured, given the problems with the individual insurance market, the low numbers and high turnover of participants and the lack of tax benefits which make it less attractive to individuals. All of this makes the pool of participants amongst which claims can be distributed even smaller, resulting in higher costs to individuals and the insurance companies themselves.
But, that wasn't the President's point. He didn't tell this story to promote reforms in the individual insurance market, to make it equitable with employer-based insurance by giving it the same tax benefits or allowing people to purchase insurance from any state they'd like. Instead, this was a story, much like the cases of tonsil-removing, foot-amputating doctors, that was meant to villify the insurance industry and exploit people's emotions given the tragic ending Mr. Raddatz faced at the hands of his evil insurance company under President Obama's made-up version of the story. If, as he said this weekend, President Obama really wants to open a new chapter, "not one dominated by willful misrepresentations and outright distortions", then perhaps he should start leading by example.