America’s health insurance system is ailing in ways that hurt many consumers despite the federal government’s efforts to overhaul it. That’s the view of a former industry executive who spent 20 years trying to protect the image of major health insurers and now is willing to reveal their secrets in an effort to help consumers.
Bottom Line/Personal asked Wendell Potter to explain how consumers can protect themselves from sneaky insurance company practices. Here’s what health insurance companies don’t want you to know…
1. We don’t want your business… not unless you’re young and completely healthy, that is. Insurers routinely reject one-third or more of people who apply for individual coverage. It isn’t just the chronically ill and out of shape who are turned away by insurers, either. It’s frequently anyone who has any upcoming or ongoing medical expenses — even something as minor as corns or cataracts might be grounds for disqualification.
Also, health insurance applications inevitably ask whether the applicant has been previously rejected by another insurer — and they tend to reject anyone who has been. So once one health insurance company turns you down, it can be extremely difficult or impossible to obtain coverage anywhere.
What to do: Before applying for individual health insurance, try a membership organization or association that provides benefits to its members. Or visit www.HealthCare.gov to find a list of private insurance plans for individuals, families and small businesses in your region. Submit applications to most or all of these companies at the same time. That way, if you are rejected by one or more insurers, the rejections will come only after you have submitted applications to other insurers, eliminating the need to disclose prior rejections.
If multiple members of your family need coverage, submit applications together as a family and individually to increase the odds that at least some of you will be offered reasonable coverage.
Because of the new federal legislation, all states now offer high-risk-insurance pools for those who are not healthy enough to obtain health insurance on the open market. Unfortunately, you won’t qualify for these pools until you have been without health insurance for at least six months.
If you want help navigating your health insurance options, contact your state’s insurance department and ask if there is someone on staff who can assist you. If there isn’t, contact an insurance broker that specializes in health insurance.
2. If your premiums are not going up this year, it is because we’ve come up with sneakier ways to make your coverage a lot more expensive. Insurers increasingly are slipping through price increases by keeping premiums relatively level but significantly increasing co-pays and deductibles or eliminating specific types of coverage. Most people don’t look much past the monthly premium when they evaluate their options during open enrollment or read about changes to their coverage. So they often don’t even realize that their coverage has been gutted until they get sick and find out that they’re responsible for much or all of the bills.
Examples: A Blue Cross/Blue Shield policy in Indiana now imposes a stunningly high 50% co-pay for network providers. Many insurers are dropping large numbers of medical-care providers from their coverage networks — plan holders might go to the same doctor they always have only to be hit with a huge bill for using what is now an out-of-network provider with a co-pay of 70%. Some insurers have quietly removed coverage for mental health and/or substance-abuse treatment and other health-care categories from certain policies entirely.
My own son recently was informed that his health insurance plan had been discontinued but that a new plan was available for a similar premium. This new plan had a $5,000 deductible — 10 times the size of his previous plan’s $500 deductible.
What to do: If you’re in an individual plan, carefully read all updates and handbooks that you receive from your health insurance company and pay special attention to changes in co-pays, deductibles and excluded categories and services.
If you are not certain, call your insurer to confirm coverage of the particular services and providers that you use. If you are told that a drug or procedure that your doctor has recommended is not covered, ask your doctor to write a letter to the insurer explaining why it is medically necessary for you to have it.
If you’re in a group plan, ask the plan administrator to help you understand the potential out-of-pocket costs associated with each plan offered during the open-enrollment period.
Also ask if your employer will cover any of these out-of-pocket expenses — some do, but employees don’t always know this.
3. We would rather decline coverage for a legitimate claim than risk paying a claim that we don’t have to. Health insurance companies routinely, and sometimes arbitrarily, reject claims that should be covered based on such things as clerical errors, missing information and unclear language about covered benefits. Some of these rejections are done by computer with no human reviewing the claim at all.
What to do: Always appeal rejected claims. It is your legal right, and these appeals very often are successful — in some states, the claims-appeal success rate is greater than 50%. The insurers know this, but they go right on rejecting legitimate claims because they know that many policyholders don’t bother to appeal.
If you are in a group plan, bring the matter to the plan administrator. If you have an individual plan, read the policy to find out how to appeal, or contact your state’s insurance regulator and ask for instructions. Also ask the agency how to file a complaint with the insurance commissioner. Let the insurer know that you have done so.
If your appeal fails, contact your state insurance department to ask about additional appeal options. Also contact consumer reporters in the local media and ask if they are interested in a story about a health insurance company that is treating a policyholder unfairly. The media is most likely to be interested if it is a life-or-death matter or if a child’s health is at stake. Insurers often relent when the press picks up the story.
You also could ask a lawyer, even if it’s a friend or family member, to write a letter to the insurance company on your behalf.
4. A national health-care system might be headed our way, but residents of your state might not fully benefit. Starting in 2014, each state will have an insurance exchange where individuals and small businesses can compare the policies available to them. But while some states intend to actively negotiate rates and vet these policies to ensure that each offers value to consumers, other states do not. In states that don’t, there easily could be language hidden in a policy’s small print that makes the coverage far less appealing than it seems.
What to do: When the exchanges are up and running, call your state’s insurance agency and ask if the state is an “active purchaser” — that’s the official term for states that play an active role in negotiating rates and terms. California and Massachusetts intend to be active purchasers, for example.
If your state is not an active purchaser, you’ll have to play detective, carefully picking through the policy language in search of co-pays, deductibles, exclusions and limits before signing up — exactly the sort of challenge that the exchanges were supposed to eliminate.