“Insurance – an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.” ~ Ambrose Bierce.
When I was a lawyer I worked for several insurance companies in a defense capacity and got a first hand look behind the insurance company face at the actuarial reality. Insurance is not all Good Hands and Geckos as it turns out. Rather, insurance is about numbers, plain and simple; numbers of dollars, accidents, deaths, etc. Insurance companies predict risk – how much it will cost when things go bad, and how much to charge customers to cover that cost and still make a tidy profit. They are very very good at doing this.
Your insurance company knows about you because it has information on millions of other people with your same traits spanning decades. Therefore, if you are a male aged 30-45, with a baseline of physical health and other indicators you will get quoted a certain rate for life insurance. If you are a smoker, that all changes and you get quoted a much higher rate which reflects the increased likelihood that you will have substantially higher medical expenses in the future. It is not guaranteed, but it is enough of a statistical certainty that it justifies charging more.
Sound heartless? Well, it is. It’s got nothing to do with heart. There is no room for caring in actuarial tables. That is why, when dealing with insurance companies of any kind, we experience a startling lack of empathy. In particular, health insurers consistently fail at relating to their customers in an appropriate way. For most of us, health insurers are necessary evils. They help pay for prohibitively expensive medical care when the need arises. Frequently, when we are dealing with insurers, we are in crisis. The last thing we want to do is wrangle with some senseless bureaucrat who couldn’t care less about the very real problems we are facing. Add to that the bureaucrat’s institutionally mandated drive to pay the least amount possible, and the whole process leaves us balled up and shaking in the corner.
So, why do we need health insurance? The conventional wisdom is that we need it because without it we could not pay for costly medical care. But doesn’t this just sound like a deal between the insurance companies and the medical providers? They charge really high prices so that no one can afford it. Insurance companies then pay those high prices (but of course at a huge discount that regular people don’t get), and then charge their customers a monthly fee that is statistically guaranteed to cover the cost of any likely events.
But what if there was no insurance company taking its huge cut out of the middle? If we paid our monthly premiums directly to the medical care provider, couldn’t the provider charge less? And wouldn’t that solve the problem of insurers meddling in health care decisions? And wouldn’t it be a system vastly more efficient? Sadly, proponents of such a system do not have a billion dollar lobby. The guys with the commercials do. And so, the status quo continues even as the health care system spins wildly out of control.
Insurance companies are like the house in a casino. The odds are always in their favor because they make the rules. And they always win. Consumers dutifully pay their premiums hoping that they never have to try to cash out on their investment. When they do need it, more often than not they encounter resistance in various forms.
Probably the most significant of these is the Insurer’s right to approve treatment. By approve, I mean dictate. It’s right there in the insurance contract – if you want the insurer to pay for your treatment, you agree that the company gets to say if it is medically necessary or not. And if its not, guess what… So now, appropriate treatment is no longer only up to the patient, or the doctor, or the therapist. It is once again up to the insurance bureaucrat. The same one who had no empathy for the customer and who only cared about preserving his bottom line numbers for the calculation of his year-end bonus. He gets to say whether a treatment is medically necessary, whether a particular medication should be used or whether a cheaper or generic one should be substituted, and how much treatment a patient should receive. He gets to say that the company will pay for this treatment but not that one (that one is too expensive). And he gets to say the company will only pay for this much treatment. After that you’re on your own.
So what can you do about it?
1. Know Your Plan Options. While most people do not have a great deal of choice in the health insurance they have, any choice that is available should be examined carefully. As a general rule, the less expensive the plan, the less it covers and the less autonomy the patient has. PPOs, for example, usually allow the patients to pick their own providers regardless of network. So, even though that PPO may cost an extra few dollars per pay period, it could be worth it to you if it affords more autonomy in the decision making process. Examine all options made available by your employer, but do not make the mistake of only looking at premium cost of the plan. There is much more to it than that.
2. Know The Type Of User You Are. Have you and will you continue to need to see specialists? Do you have an established set of out of network providers you want to see? Are you likely to have recurring medical or mental health needs requiring ongoing insurance company involvement and payment? If you answered yes to any of these questions, you may prefer to pay a little more for additional control over these decisions. Match the type of user you are to the available plan that best suits you and your situation. If you are a heavy user of health insurance benefits, you’ll probably be glad you paid a little more up front when it eases the hassles later on at the point of service.
3. Know Your Rights. When you do settle on a plan or if you already have one you are established in, read the policy. It’s that thick booklet the insurance company sends you at the beginning of each enrollment year. If you are like most people, you flip through it, realize that most of it is incomprehensible then file it away for safekeeping and prosperity. Even though it is difficult reading full of archaic lawyer-created language, it is worth the time to slog through it. Once you get the hang of the language, it becomes much easier to understand. Go through it with a highlighter and mark passages or terms you don’t understand. Then call the 24-hour customer service line and ask them what it means. It is a lot of effort, sure, but you will be much better informed about what your plan does and does not cover at the end of it. You will also figure out what the company will and will not do for you under the policy. Perhaps most importantly, the policy will contain provisions regarding disputes, how those disputes are settled, and options regarding appeals, and external legal rights. Then the next time you find yourself arguing with a company adjuster, you will be armed with more than just your rage against the machine.
4. Get Your Providers To Help You. Usually providers have been through it before with insurance companies. Indeed, did you know that most hospitals have huge departments often of 100 or more people whose sole job it is to negotiate with insurance companies, patient by patient, treatment by treatment, 24 hours a day, seven days a week? And we wonder why health care is so expensive when huge administrative costs like that must be built in? Suffice it to say they’ve seen what you’re experiencing before. And if you’re lucky they’ve figured out a way around it or through it that will minimize your frustration.
5. Opt Out. Ultimately, you do have a choice of whether to use your health insurance in any given instance. Unfortunately, for most of us, the cost of what we need is usually beyond the range of affordable. But not always. Sometimes it may make more sense to try to pay out of pocket for certain services. Often providers will work with patients and slide their fees downward if they are paying cash. And, as of right now, paying out of pocket remains the only way to maintain complete control over healthcare decisions.
In the mental health area, there may be additional reasons for deciding not to use insurance. For instance, the “medically necessary” analysis usually requires that your provider issue a medical diagnosis of a particular mental illness or condition, together with an evaluation of severity and a specific plan for treatment of the condition. Although this might not seem unreasonable on its face, it can have other consequences for patients down the road. The patient will be obligated to disclose such diagnoses in the future if applying for life insurance, for example. Like for the smoker, a person with a history of depression is likely to be charged a higher amount. And, of course, any diagnosis causes the creation of a record that follows the patient. Those worried about the stigma of receiving mental health treatment beware. Because health plans are often administered through the workplace, it is remarkably easy for supposedly protected confidential information to get back to the company, particularly where disputes over coverage or payment arise. Where such sensitivities exist, or where it’s not worth the risk, the only real solution is to pay out of pocket and keep the insurance company (and your employer) out of the health care decision all together.
What do you think? Do you have effective techniques for dealing with insurance companies? Have you opted to pay out of pocket for more control? What has worked for you?
Andrew D. Kang, JD, LICSW, is a former attorney turned licensed psychotherapist. His practice, Boston Professionals Counseling, LLC, focuses on helping attorneys and professionals with the issues they face and is located in Boston, Massachusetts. Contact him at andy@bostonprofessionalscounseling.com or visit his website at www.bostonprofessionalscounseling.com