Unethical Tactics Used by Insurance Companies
An early model for today’s health insurance took root in Texas in the 1920s at the Baylor University hospital. When the school’s vice president learned that many people were unable to pay their bills, he offered a solution: people could pay 50 cents a month in exchange for up to 21 days in the hospital as needed.
The proposition helped the hospital stay financially solvent. It also allowed people to avoid catastrophic debt from illnesses that, in the absence of today’s sophisticated medicine, could hit early and linger long, causing families to lose their home, job, or family farm.
Those early charitable forms of health insurance were non-profit and served all people equally, regardless of age or health. As they spread across the country, enterprising individuals saw ways to leverage them to make a profit. For example, they could undercut premiums by not serving everyone. Instead, they catered to healthy, young workers, knowing they would accrue fewer costs.
Today, few of us can remember a time when health insurance was anything but a booming business. On the upside, the commercialization of healthcare promotes healthy competition between carriers that can drive rates down. On the downside, it has led to some companies using underhanded tactics to squeeze more money out of their clients and boost their bottom line.
So how do you know if your health insurance company is taking advantage of you? Here are a few things to watch out for:
1. Companies failing to disclose what they don’t pay for
As you review all of the things your insurance company will pay for, read between the lines and see what they won’t pay for. You may think that just because your doctor prescribes something, your insurance will cover, but this is not the case. They may not cover alternative treatments, such as sublingual immunotherapy allergy treatment—even when prescribed by a medical doctor. They may deny claims for weight loss surgeries, mental health support, certain prescription drugs, hospital stays, fertility treatments, or treatments that they deem to be cosmetic in nature.
Assess the full scope of your current healthcare needs and those that may develop as a result of your health history or your family’s health history. Compare your needs against what your plan offers. If you see troubling gaps, consider switching to a different insurance provider.
2. Denial of out-of-network providers
If an insurance company only covers in-network providers, you’ll know to do your homework and make sure that the doctor’s office or hospital that you’re visiting is a covered provider. But that may not be enough. We have seen situations where a specialist in a hospital happens to be out-of-network and the patient is not informed. Thus, they’re left footing the bill for the radiologist, anesthesiologist or some other physician who provided specialty care.
The same applies to lab tests; the lab your doctor works with may not be in-network, and you’ll soon be served with a hefty bill.
Make sure that every procedure or test that is ordered on your behalf is covered by insurance. This requires extra vigilance on your part, but it’s critical for avoiding unpleasant surprises.
3. Routine denial of expensive claims
Sadly, some insurance companies make a practice of denying high-dollar claims—even when they are for covered services. Why? They are banking on customers not understanding the claim or not realizing that they can dispute the denial. When patients do call them out, the call agents will often dismiss the problem as a computer error.
Always contact your insurer about denied claims, and ask for a detailed explanation of why they were denied. Do your homework by studying your plan and knowing what it includes. We know it’s not exciting reading, but this knowledge provides the power that you need to protect your health and your finances.
Enlist the help of your doctor’s staff to assist you in making your case with your insurance company, and make sure that you can support your argument with adequate documentation from your medical records.
Some insurance companies will drag their feet in urgent cases, requesting that you try different therapies before approving the one you need most. They are banking on the patient giving up on the mire of insurance bureaucracy and paying out of pocket for critical therapies or medications. Be prepared to be your own advocate if you feel that your insurance company is delaying payment to try to get out of it.
5. Failing to pay for prescription drugs
Prescription drug benefits are often a point of contention between health insurance companies and their customers. Insurance providers may fail to offer these benefits until you meet a high deductible. They also place certain drugs on a “formulary exclusion list” and fail to cover them. Why? Because they don’t get a big enough rebate from the drug manufacturer.
This can happen suddenly, causing people to get off of medications that have worked well for them for years. Formulary exclusions can be particular devastating when they affect drugs that people depend on to treat serious diseases like diabetes and cancer.
Our parting advice to you: Know what your insurance plan covers, and question all denied claims. Don’t be afraid to be your own advocate, and enlist the help of your doctor to back you up. Your insurance company or hospital will likely have patient advocates to help you out. They can be helpful, but remember that they have their employer’s best interest in mind. If something doesn’t seem right, trust your instincts and keep agitating for the benefits that you are entitled to.