Patrick Nelson woke up with a pain in his side. Perfectly healthy, or so he thought, he learned he was in the advanced stages of a fast-growing lung cancer that had spread to his liver.

This is the kind of brutal bolt of news that floors you. But Nelson is not given to wallowing, and he will tell you at length how fortunate he is. To have a great wife, a job and, as he put it, "the ability all these years to pay my insurance premiums."

"You don't want to liquidate your family's assets for cancer," he says.

Then he got a letter from his insurance company.

Sorry, it read. We're dropping your prescription-drug coverage.

"I couldn't believe it," says Nelson, 58, of Tacoma. "I've paid for health coverage my entire life. I've been with this same company for 10 years. Then right when I get sick, they say I'm out of luck?"

Nelson was not singled out. Lifewise, his insurer, sent the same letter to 42,000 state residents. Either go without any coverage for most prescription pharmaceuticals, it said, or switch to a far more expensive policy.

Plus there was this: If you want to switch, you have to go through a health screening.

That's what really unmoored Nelson.

"I've got two tumors the size of baseballs," he said. "You couldn't come up with a more obvious pre-existing condition. So basically, that's saying they're cutting me loose."

All due to a bureaucratic tug of war. That, regardless of who is to blame, is yet another example of our dysfunctional health system.

Lifewise, a subsidiary of Premera, blames it on the state insurance commissioner, Mike Kreidler. He recently ordered that drug-benefit policies must cover both generic and name-brand drugs. Nelson and the other 42,000 have policies that cover only generic drugs, making them cheaper.

Kreidler says he's in favor of generic drugs. But he moved to bar policies that cover solely generics because there are a raft of illnesses for which there are only brand-name drugs for treatment.

"We received requests from all the major health insurers in the individual market to remove brand-name drug coverage for everyone," Kreidler wrote to Lifewise's upset customers. "If I had not acted, thousands of people would have lost vital drug coverage that could treat their condition and possibly save their lives."

Lifewise, though, says adding brand-name drugs to the policy would have increased its costs too much.

"We are disappointed (in the insurance commissioner's decision)," the Lifewise letter said. "We know consumers appreciate having the ability to select the right level of costs and benefits to suit their requirements."

The insurance commissioner's office told me "it would be illegal" for Lifewise to disqualify Nelson for a pre-existing condition when his coverage is being dropped for no fault of his own. I was pleased to get to tell the Nelsons that at least they won't be tossed out entirely.

But they will have to pay an outrageous premium hike to get drug coverage, which any cancer patient desperately needs. Currently, their policy costs $740 a month. Once this plan is dropped Aug. 1, getting insurance through Lifewise with drug coverage will run them $1,458 per month — a 97 percent increase, though it's for a more comprehensive policy, according to a rate sheet filed with the state.

Is this big government backfiring or private-market gouging? It matters because it may be a precursor of national health-care reform, which also mandates drug coverage include both generic and brand-name drugs, starting in 2014.

Not even the Nelsons agree. Patrick sides with the insurance commissioner, saying Kreidler is "just trying to referee some fairness" into health policies, and Lifewise's response was "mean-spirited" and "way out of line."

But Patrick's wife, Christine, says the generics-only drug policy was functioning fine, until Kreidler interfered. She senses the influence of the pharmaceutical industry.

"Why didn't he just require both kinds of plans, and let the consumers choose?" she said. "That would have been reasonable. Instead, now everyone's fighting and blaming each other, and we're out here in limbo."

With cancer. In insurance limbo.

"It's very unsettling," Patrick Nelson says. "One minute you're healthy and insured, the next you're sick and cut off.

"I never thought this would happen to me."

There's good reason for that. Nelson is an insurance agent. He's got 31 years in the business. In fact, he brokers this very Lifewise policy that is now threatening to dump him in his hour of need.

When even the insiders have this much trouble navigating the system, do we need any more proof it's broken?

Danny Westneat's column appears Wednesday and Sunday. Reach him at 206-464-2086 or dwestneat@seattletimes.com.