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Understanding health insurance can be difficult
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Published: October 26, 2009
CHARLOTTE - A medical professional by training, Sherry Suprock understands her health insurance policy -- even the fine print.
As such, she's found herself battling her insurer not once, but twice, this year, over claims she feels were wrongly denied. Both times, she's filed complaints against the insurer with the state. Her goal in reaching out to regulators was to not only resolve her issues, but to send a message that the system needs improving.
"I worry some people aren't educated (about their policy)," she said. And if there is a dispute, resolving them, she said, can take "a lot of time and energy."
As lawmakers craft proposals to revamp the nation's health care system, many Americans disagree on the best way change the system. Debate rages as to whether reform would raise or lower costs and improve the quality of care or make it worse.
One thing experts mostly agree on: Even if reform passes, understanding your insurance policy is not likely to become any easier, and battles with insurers over coverage are likely to continue.
A review of complaints filed with North Carolina's Department of Insurance shows that many state residents are confused about their coverage. Between Jan. 1 and Oct. 13 of this year, more than 2,050 written complaints about health care insurers had been filed, according to the department's Consumer Services Division. That's on par with the number filed during the same period in 2008 and 2007.
As with previous years, most complaints -- about two-thirds -- involved the handling of claims, such as denials or insufficient payments.
Most complaints stem from a consumer's misunderstanding of their policy, said Bob Lisson, deputy commissioner with the division.
Also new for 2009: A growing number of people who bought bare-bones plans -- those with low premiums that cover only catastrophic events -- are filing complaints because they don't understand what's covered, Lisson said.
Of all health insurance-related complaints the state gets involved with, regulators find the insurer was at fault about 15 percent of the time. In the rest of the cases, the state either finds the insurance company was not at fault or it lacks the information to make a determination.
"A lot of people think they are well covered, and then find out they are not nearly as covered as they think they are," said Jon Oberlander, an associate professor in health policy research at UNC Chapel Hill. "If you wanted to create a more confusing health care system, it'd be hard to do better than the U.S. There's a lot of fine print."
Poor communication
Nationally, consumers feel health care insurers do a poor job of communicating with policyholders, according to the 2009 J.D. Power and Associates 2009 National Health Insurance Plan Study. In the study, respondents gave insurers poor ratings for providing information and communication, which respondents said is the third most important factor determining their satisfaction with a plan. The first two factors are benefit levels and having a choice in medical providers.
Health care insurers know policies can be confusing, said Susan Pisano, spokeswoman with the trade group America's Health Insurance Plans. She said insurers support a move toward "clarity and simplicity" in how information is presented to consumers so they can understand how they can use their benefits and what procedures are covered.
"We really are on the cusp with respect to (better) understanding benefits," she said.
Experts say small, positive, steps are being taken toward greater clarity in health insurance policies.
Currently, insurers don't have to disclose details about what specific treatments they will pay for and how much of the cost they will cover because companies consider the data to be trade secrets, says Diane Archer, an attorney and director of the Health Care Project at the Institute for America's Future, a think tank.
If consumers knew a certain company paid the most to treat a certain disease, the thinking goes, then all patients with that illness would flock to the insurer. A proposal before the House finance committee would require insurers disclose some payment information to an independent third party, Archer said.
"At least an outsider would be able to look at the data in an objective way and analyze it," she said. "How much ends up in the hands of patients, I don't know."
State has problems
In North Carolina, the state's insurance department collects plenty of examples of consumers who don't understand what their insurer covers and what it doesn't.
A typical example, from the state's files: A Charlotte man filed a complaint with the state this year after his insurer, Aetna, paid for only part of his annual physical. The man believed his $275 physical was fully covered because his doctor was in Aetna's network.
What the consumer didn't know, according to the state, is his policy calls for Aetna to pay up to a maximum of $200 for the visit, with the patient expected to pay the rest.
"There are so many details, it would be hard to know everything," said Oberlander, the UNC professor. "Sometimes it's not presented clearly, and sometimes insurers don't want to publicize limits of their coverage."
Of the complaints the N.C. Insurance Department closed this year, the state was unable to help consumers about 35 percent of time because the complaints involved companies or policies the department doesn't regulate.
South Carolina's Insurance Department gets "a lot" of calls from consumers who don't understand their policies, said spokeswoman Ann Robertson. Most callers haven't read their policy clearly, she said. Sometimes they don't understand the terms used.
Lisa Carlisto, a Charlotte mother of two, filed a complaint with the state after her insurer, UnitedHealthcare, refused to let her see an out-of-network specialist at the in-network rate. Carlisto said her research showed the provider was the only one in the area who could provide the specialized treatment. She spent around nine months appealing her case with UnitedHealthcare. She contacted the state, which, she said, was "fantastic in helping me." The case was resolved in about a month.
She said the state communicated with the insurer, which sent her a letter saying it was researching her case. The insurer decided to pay for her treatments at an in-network benefit level for a year.
Carlisto said she felt the state cut through the insurer's bureaucracy and got her information to the proper decision makers.
"The state understands the process and what's going on," she said. "Eventually they got (her information) to the right person and it worked out."
Insurers penalized
To be sure, the state sometimes finds insurers are in the wrong.
Last year, insurers paid $2.3 million to N.C. consumers after the state become involved in their complaints, according to the department. About $1.5 million went to consumers who held group health care plans provided by an employer, and $800,000 was paid to consumers who bought individual health care policies.
Suprock's daughter was attending college in Ohio when she suffered kidney stones and had to go to the hospital. The daughter was still covered by her parents' Blue Cross and Blue Shield of North Carolina policy, and a university plan.
Both plans refused to pay the bills. Suprock filed a complaint in North Carolina last year, and the state contacted Blue Cross, which ultimately paid about $950 of the bill, according to state records.
Still, Suprock feels the issue hasn't been fully resolved.
Recently, she received a bill related to her daughter's kidney stone treatment for around $3,000 that she believes the insurers should pay. She opted to pay the bill because the medical provider was threatening to turn the account over to a collection agency.
"We have two insurance plans covering her. But we paid for it out of our own pocket," she said.
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