Most people will say they are “all set” when it comes to health insurance related issues mainly because while disability insurance in “an all-in your pocket assumption”, health insurance is an all out of pocket expenditure including co-pays, deductibles, coinsurance and maximum yearly out of pocket expenditures. It would seem that when money is coming in, people will just assume it will keep coming in, while actual out of pocket spending for health insurance requires more attention to detail.
I don’t get asked health insurance questions very often because most health insurers provide written publications that describe every little detail of the health plan purchased. Medicare does the same every year and people have a quick reference to what is covered and what isn’t. As a result, people know exactly what they have to pay out and when.
What most people do not know about health insurance is that it is also “risk managed” and not all procedures are approved and covered. Even Medicare, which is really an entitlement since workers contribute to it, is risk managed and covered procedures can be denied. In fact, there are more procedures denied by health insurers, than any other type of insurance.
In May of 1996, a physician by the name of Linda Peeno, a Humana physician whistleblower, testified before Congress concerning Humana’s deliberate denials of claims in order to show higher profits. While there have been many issues since involving health insurers the incidents are rarely reported in the press and people are unlikely to realize that health insurers sometimes aren’t operating honestly either.
Sometime after the year 2000 employers were offered a new design for disability insurance, namely “Group Plans” that included Disability, Health Insurance and AD&D (Accidental Death and Dismemberment). Not many employees realized that these combination Plans are covered under ERISA, and of course, we don’t hear an awful lot about that either.For some reason, health insurance escapes the public attention for wrongdoing while historically disability insurers have not.
AD&D insurance is an anomaly and in practice a contradiction. Let me give you an example. I was retained by an attorney to assist in an Accidental Death claim for over $150,000. The circumstances involved a 45 year-old-man who lost control of his vehicle attempting to avoid an accident when the other driver ran a stop sign. The insured died as a result of the accident.
During the autopsy, it was discovered that the insured had heart disease and likely suffered a heart attack. The insurance company claimed that the insured had the heart attack first, then collided with the other car. Therefore, the cause of death was due to sickness, not the result of an accident. No payment.
AD&D insurers are very clever when they put “autopsy” requirements in their policies. Nearly every pre-existing condition imaginable can be used as “cause of death”. AD&D riders to Group Plans are often contributory (employee paid) and are probably not worth the added premium. I put all Accident insurance into this category.
While health insurance may seem pretty straight forward, it often isn’t especially when families were uninsurable due to pre-existing conditions, or when experimental treatments were recommended by physicians. Again, the public never hears about individual stories that kill people because health insurers do not want to cover procedures that would be life saving.
ObamaCare is yet another anomaly that people seem to know little about. In short, the HealthCare.gov website offers health coverage that is subsidized by the federal government for low income people. High income people are required to pay an additional amount of tax to help pay for the cost of the subsidy. Therefore, ObamaCare is either a low cost health insurance, or a very expensive one. Those who do not qualify for the subsidy pay one of the highest rates for health insurance there is.
COBRA is still out there, and to my knowledge employers are required by the federal government to offer employees COBRA when they are terminated under FMLA (Family Medical Leave Act) guidelines. COBRA is an administrative act of keeping ex-employees on the employer’s group health plan, but charging as much as a 40% sur charge. This is why COBRA is so much more expensive than the employer’s premium for the regular Group insurance.
I hope that this basic introduction has at least given you one piece of information about health insurance you didn’t know. If you have any questions please feel free to contact me.
http://www.disabilityclaimssolutions.com
