Health Insurance Consumer Information

Pollitz talks about the new Health Care Proposals, on Friday, June 19th’s NewsHour.

Los Angeles Times columnist David Lazarus writes this weekend about the universal coverage debate and what health insurers say they want to do to reform the system.  As he points out, their behavior during the 1990s insurance reform debate is probably telling — lots of noise, no action.

Lazarus quotes Karen Pollitz and other healthcare industry experts who were involved in the insurance reform proposals of fifteen years ago.

Read his column here: Here we go again: Health insurers say they support reform (LA Times, May 17, 2009)

How can people know when health insurance provides adequate coverage?

“Coverage When It Counts: What Does Health Insurance in California Cover and How Can Consumers Know?” suggests a new method for developing benchmarks to illustrate some types and costs of medical care consumers might need under a variety of scenarios, and for evaluating health insurance protection using these benchmarks.

What does it mean to be adequately insured? A growing body of research documents both health-related and financial problems that can arise when health insurance doesn’t cover enough. Rates of medical debt are growing, chiefly among the insured. One in five privately insured Americans with chronic conditions live in families with medical bill problems—an increase from 16 percent in 2003. When out-of-pocket spending for medical care exceeds just 2.5 percent of income—less for low-income persons—financial burdens on families become substantial. Studies show that the underinsured and uninsured face similar problems accessing medical care and managing financial burdens.

Knowing whether insurance provides adequate coverage can be a challenge. Health insurance policies are complex products, highly variable in their design, and key information about how coverage works is not always disclosed during marketing. Further, health insurance promises protection against future, unknown events. Consumers who are healthy today can find it difficult to anticipate future medical problems and costs and harder still to evaluate how insurance might cover those needs.

The protection health insurance offers today is highly dependent on the policy purchased. An insured person who becomes seriously ill might have to pay thousands, or tens of thousands, of dollars out-of-pocket for needed care. For many consumers that range represents the difference between health security and financial catastrophe. Consumers compare the prices of health insurance policies, but cannot always reliably tell if they are comparing like products. The affordability of health insurance premiums cannot be considered independently of the adequacy of coverage health insurance provides. At a minimum, the difference in protection health insurance offers should be readily available for all to see.

Health insurance should be transparent, so that consumers know what they are getting in a market filled with options that are not always equal. Many urge that consumers value this plan choice, and that choice is vital to efficient competition in health insurance markets. Yet, economists teach that well functioning markets require transparent information so that both buyers and sellers can understand and evaluate options. That’s why health insurance transparency and coverage adequacy go hand in hand.

This paper summarizes findings of two reports studying the adequacy and transparency of health insurance in Massachusetts and California. Those reports suggest a new method for developing benchmarks to illustrate types and costs of medical care under a variety of scenarios, and for evaluating insurance protection using these benchmarks. Using simulated claims scenarios for different types of patients we analyzed the content of coverage under a variety of health insurance policies sold to individuals and small employers in Massachusetts and California and estimated out-of-pocket costs for care that patients might face. We also reviewed the transparency and accessibility of information that consumers would need to understand how coverage works.

We recommend developing standardized health plan comparison tools—patterned on the U.S. Food and Drug Administration nutrition label, but for health insurance—that could help consumers appreciate the kinds of medical events for which health insurance may be needed and relative levels of protection provided under different policies.

How can people know when health insurance provides adequate coverage?

“Coverage When It Counts: What Does Health Insurance in Massachusetts Cover and How Can Consumers Know?” suggests a new method for developing benchmarks to illustrate some types and costs of medical care consumers might need under a variety of scenarios, and for evaluating health insurance protection using these benchmarks.

Using simulated claims scenarios for different types of patients—one diagnosed with early stage breast cancer, another who has a heart attack, and a third with diabetes—the authors analyzed the content of coverage provided by 10 health insurance plans sold in Massachusetts and estimated out-of-pocket costs for care that patients might face. They also reviewed the transparency and accessibility of information about policies that consumers would need to understand how coverage works. Massachusetts was chosen because of its precedent-setting reforms to achieve universal coverage that included the establishment of standards for minimum coverage for all residents.

The report concludes with a recommendation for the development of standardized health plan comparison tools—patterned on the FDA nutrition label, but for health insurance—that could help consumers appreciate the kinds of medical events for which health insurance may be needed.

From Smartmoney.com: “Too young to qualify for Medicare and rarely covered by their employers, early retirees can face [health insurance] premiums they neither dreamed of nor planned for—often three or more times what they paid while they were working.”

“You basically can’t count on insurance remaining even mildly affordable in individual markets,”says Karen Pollitz, quoted in the article.

As the article points out, “seemingly healthy retirees are frequently surprised to learn they aren’t ‘viable,’” as insurers in the individual market routinely underwrite policies on older people, either denying them outright or charging exceptionally high premiums.

Bernadine Healy, MD, former director of NIH and now health editor at US News & World Report, has written a chilling piece on how easy it is for insurers to deny claims. From the article, “How Crafty Health Insurers Are Denying Care“:

An estimated 10 to 15 percent of [health insurance] claims are denied for various reasons, some of them technical, such as not meeting filing deadlines or failing to get pretreatment authorizations. Denials that produce the most disputes are those where insurers judge the care to be unnecessary or unproven, pitting a proverbial sick David against a multibillion-dollar Goliath. What few Davids know is that insurance contracts by law grant companies the legal right to manage a patient’s care, including denying it, sight unseen, and give them the final say, if challenged. Unless the state steps in.

She notes that insurance companies use software that even they call “denial engines,” that reviews every claim in the hopes of turning it down, a practice that Dr. Healy calls “serving up excuses to deny legitimate coverage.”  What’s a consumer to do?

Dr. Healy points out that in 43 states and the District of Columbia, you can file an appeal for a state review if you are denied coverage and have gone through the insurer’s opaque internal review process.  The good news is that if you can stand the red tape, about half of the time the consumer wins her appeal. And what the state says is the final word.

It’s still troubling that insurers are doing such a poor job of adhering to the law that they are losing half the appeals brought to the state, and that consumers in seven states have no state-based recourse.

As always, reading your policy carefully is the first step in ensuring you get the coverage you’re entitled to.

If you still have concerns that you are being denied a policy or denied coverage  without a good reason, our Consumer Guides to Getting and Keeping Health Insurance, for every state, can get you on the path to finding out what your state requires, and how to contact the appropriate authorities.

The San Francisco Chronicle presents the results of a study saying 22% of Americans who were surveyed, said they were avoiding doctor visits to save money in tough economic times. But will this decision cost them their health?

As the article states:

Officials who regulate state insurance practices said they’re concerned that as times get tougher, an increasing number of insured will forgo necessary care and possibly incur greater costs down the road due to delays in treatment.
-22% of Americans surveyed cut visits to doctor, by Victoria Colliver

Are you avoiding or delaying a visit to the doctor because you’re unsure whether your plan will cover it or whether it will incur further costly expense? This may be prudent, but you can also arm yourself with more information about your health care plan and your options for staying out of debt from doctors’ visits. See our FREE Guides to Managing Medical Bills which contain valuable advice like:

• what your individual health insurance, medicare or medicaid probably covers,
• how to compare plans or figure out what your plan is supposed to cover,
• how to negotiate with your doctor’s office on steep medical bills,
• Lots of other great advice!

Please visit and download your copies today.

“I love him a lot, and I want to marry him … I just don’t want to be forced to marry him early for insurance purposes.”
Brandy Brady of Lake Charles, Louisiana, as reported in the New York Times

More trips down the aisle are being prefaced with these kinds of statements as the cost of individual health insurance in the US continues to climb.

The August 12 New York Times reports, in its story “Health Benefits Inspire Rush to Marry, or Divorce,” that one study shows 7 percent of adults in the US have a family member who married for insurance benefits, and that a wedding officiant in Kentucky estimates that one in 10 couples he marries cites health insurance as the reason for their betrothal.

Equally troubling are the stories of two married couples shared in the article. The Parishes of Nobleville, Indiana, delayed finalizing a divorce so that the wife could stay on her husband’s health insurance for chemotherapy.  The Moultons of Washington state nearly divorced, just so that ailing wife Michele could leave the policy her husband had purchased, to go into the state’s high-risk pool.  The Moultons avoided divorce only when a family member stepped in to help with the roughly $50,000 in debt that accrued because of her illness.

Are you considering all your options for getting health insurance? A lot varies by state.  Read the healthinsuranceinfo.net guide for consumers in the individual health plan market for your state (and the state of your fiance, if it’s different!).

From Victoria Knight in the August 12 Wall Street Journal:

The most prevalent way to sell phony insurance continues to be through real or bogus associations. Between 2000 and 2002, 144 such scams left more than 200,000 policyholders with more than $252 million in medical bills, according to a 2004 report by Congressional investigators. Illegal health plans flourish especially during periods of high premium increases. On Thursday the National Association of Insurance Commissioners issued an alert to consumers warning them about such fraudsters.

What can you do to protect yourself if you’re looking at association health plans? The article offers the following advice:

• Associations that provide a wide variety of member services, such as credentialing, rather than just health insurance, and which have stricter entry requirements, tend to offer the better plans.
• Call your state’s insurance department to find out if the insurer that underwrites the association’s plan is licensed in the state where you live, is financially sound and has a good track record of paying claims.
• If you’re buying a policy from a national association, find out if your state regulator is authorized to intervene if you have problems. If the association is headquartered in another state, for instance, your state’s regulator’s hands may be tied and the other state’s regulator may not be able to help either because you’re not a resident.
• Don’t just look at the premiums. A low monthly price may be attractive but to find out the real value of the plan, look at the deductible, co-insurance and benefits. If you have a past or existing condition, is it covered? And if you do get sick, will you be able to renew the policy, and, if so, at what cost? (healthinsuranceinfo.net’s Evaluating Health Insurance Choices Worksheet FREE two-page worksheet will help you compare health insurance costs and coverage ( PDF format, two pages, 135 KB).)
• Look for a well-established plan with a history of reasonable renewal rates.
• Explore all your options, including policies insurers sell directly to individuals or small business owners, as they may offer more comprehensive coverage for less.

Read the original article at the Wall Street Journal’s website: More Turn to Professional Groups for Insurance