A Silly But True Health Insurance Claim Dispute
When we “save up for a rainy day” in case of loss of income or some emergency, if the rainy day never comes, then we still have that financial padding.
When a person does not use insurance he has purchased, the money already paid for the premiums has been spent because the insurer took the risk without knowing whether the coverage would be used. It is taking the risk for a pool of people. Some have claims, some don’t. They make money on some and lose money on others. They don’t know in advance who will have hail damage or cancer or cause an accident, but they know that an approximate percentage of those in the pool will. It is based on probability and statistics. It is based on individual history, whether driving history or medical history. It is based on demographics. It is a mathematical calculation of risk.
We buy insurance for peace of mind because we are afraid there might in the future be a claim that we cannot pay with our own resources, so we pay premiums for coverage that we hope we never have to use.
For example, we hope we will not have hail damage on our roof, but we pay for homeowners insurance just in case. We do not plan to cause a car collision, but we pay for automobile liability insurance just in case, so our insurance will pay for the damage instead of us. We do not want to have health problems, but we pay for health insurance just in case we cannot pay for big medical bills.
It is wise to both save and have insurance. For health insurance, most have to do both because to reduce premiums it is often necessary to increase deductibles. If you have a $5,000 deductible, the insurance does not kick in until you pay the first $5,000 in bills. One can recover from $5,000 of debt, but few can pay for tens of thousands or hundreds of thousands of dollars for medical treatment of a serious condition such as cancer.
Of course, we do not want to use our insurance. No one says, “I paid for $500,000 in liability coverage and I am disappointed that I have not had a claim against me.” No one says, “I have health insurance yet I am not even using it because I am so healthy. Those folks with cancer are at least getting their money’s worth.”
The insurance carriers do not want us to use it either. They like collecting premiums. They don’t like paying claims.
I understand the concept of insurance. I buy it. What I don’t like is to have to fight about getting insurers to pay claims. Paying claims cuts into their profit.
I know about a case involving a lady who was having difficulty breathing and swallowing, with a tightness in her throat and swelling in her chest and abdomen. She did not know why she was having these problems at the time, but it turned out to be due to an allergic reaction to some new medication she had started taking. The symptoms were frightening. Appropriately, she went to the emergency department of the closest hospital. At the hospital, she underwent various diagnostic tests, including blood work and film studies. The film studies incidently revealed a cyst that was excluded from the policy as a known pre-existing condition. However, the cyst was not the cause of her symptoms.
So, how did the health insurance handle it? The entire ER visit was denied due to the pre-existing condition. The hospital was not paid, the ER physicians were not paid, the medical imaging was not paid for — nothing had been paid by insurance.
The woman tried on her own to get her insurance to pay the ER bills, but without success, so she hired an attorney to contest the denial. Her lawyer wrote the following to the health insurer that refused to pay:
“Dear (Name of Company — omitted to protect the guilty):
“Recently, my client called Blank Medical Imaging to make another payment on the bill she has been receiving for months and inquired about whether her health insurance had paid anything yet, since it had supposedly been submitted to your company as her health insurance carrier. The answer she was given is that your company refused to pay because there is an exclusion in her policy for ovarian cysts. That exclusion is irrelevant to this claim because my client did not go to the emergency department concerning her cysts. She went, late at night, as an emergency patient, because she was having difficulty swallowing and experiencing severe abdominal swelling. Although the sonogram imaging ordered by the E.R. physicians might have revealed the cysts again, that was not the reason for the imaging.
“She was not treated for the cysts at all. They were simply noted on the imaging report. By analogy, if a person went to the E.R. for a broken arm and the x-ray revealed not only the acute fracture but also a missing finger from long before, surely health insurance would not deny payment for the x-ray due to the missing finger being excluded from coverage….”
Also, based on scholarly research about human anatomy, as it turns out, ovaries are not in the throat or even the abdomen, where the symptoms were. Remember, the insured patient was having trouble swallowing and breathing.
The appeal was successful. The carrier ultimately paid for the medical imaging, the emergency physicians, and the hospital itself, who each bill separately.
That there had to be an appeal was silly, and expensive, and just plain wrong. The excluded pre-existing condition should not have been used as an excuse to avoid paying a valid claim for which the the insurance company had received premiums for coverage.
I wonder how many people in the general public simply accept similar denials of coverage.
For those of you who are outraged by such things, I recommend John Grisham’s book, The Rainmaker, which was also made into a movie of the same name starring Matt Damon.
But don’t worry, Obamacare will take care of all of us, won’t it? Predictions are that health insurance premiums will increase only 40% to 150% under the new health care law. If you have to choose between paying rent or buying groceries or paying a health insurance premium, guess which is the first to not be paid.
Be scared. Be very, very scared.
I hope that you have been saving up for a rainy day. Guess what! It’s raining.