April 6, 2014
What You Need to Know BEFORE Buying Health Insurance [Part V]:
The Truth About Health Insurance
HealthCare Education Series written by Net Advisor™
This is Part V (“The Truth About Health Insurance”) of our eight-part series on information to help you understand about health insurance costs, choosing the right plan for you, and how the industry works.
In this section, we discuss the truth about health insurance. I could probably write a book about this because there is a lot to discuss. However for now we’ll cover a little bit of real-life experience about how the industry works, tactics that may be used against you, how to address them, and what to consider when using a licensed insurance agent.
[16] Tactics an Insurance Company Might Use Against You
I had a great class in college taught by a former insurance insider and a highly respected doctor of psychology who gave us the skinny on the insurance business. Basically he told us how insurance companies try to frustrate people into settling in whatever the insurance company wants. Then after I began working in the industry, carrying three lines of insurance and six securities licenses I learned much more how the business really works.
Insurance companies are protecting themselves all the time from potential lawsuits. They will only do what they are legally contracted to do. Even if they are legally contracted to do something, doesn’t mean they will quickly approve it or pay for it. Generally the more expensive the bills, the more complicated the incident, the more likely you will have issues with an insurance company.
A. Denial Letters, Request Endless Documents, Forms
Even if you are covered for something, if the situation is complex, or costly, you may get a ‘standard’ denial letter. The insurance company might request what may seem like an infinite number pieces of information, have you fill out forms that don’t apply or exist, request the license number of the facility you are at, and all kinds of other tactics they will use at every chance to deny a claim if “x” has is not received within 30 days. Even if you are able to comply with all these tedious requests, they will sometimes “lose” information you send them.
B. Losing Records, Claims, Documents
Another tactic you could face is where the insurance company might say, ‘we never got that.’ Anything mailed to the insurance company, mail it USPS certified, or make sure their is a tracking number to show proof of delivery.
Anything faxed, keep a copy of the sent conformation page and a copy of what was sent and staple the pages together. Put everything in a folder in order by date with the newest records on the top, oldest records on the bottom. You may need a document notarized, then sent certified mail or fax if the insurance company is giving you the run around. All of this could become evidence and a notarized document creates a potential witness in case of a dispute. The notary should write in their book that they mailed the document too.
C. Handling Insurance Claim Problems
If there is a serious problem, and you’ve put it writing with your evidence (via certified mail) and there has been a lack of cooperation, you can also try your State Insurance Commissioner, the Better Business Bureau, or you may need to get advice from a legal advisor. If you feel you are being legitimately screwed, and you can prove it in writing, you can always talk to someone in the media to see if there is a public interest story there.
Whatever you do, try and do your best to be civil and professional even if it is not your fault. Never make any threats against anyone. You could end up being sued or in jail for serious threats. Remember everything that is discussed on the phone is a recorded line.
I have experience helping people who have been through exactly what I just stated. It helps to understand your legal rights and remind them what their contract says. This is why I talked about keeping good and detailed records.
Not all insurance companies do these tactics, and most are there to help you when you have a claim. Most of the time there won’t be any issue – until the insurance company has to shell out a lot of money. They have a process for claims, but not everyone who works at those call centers are licensed insurance experts.
The problem is you may get a call center employee who has no clue what they are talking about. They are reading your account from a computer screen and any notes taken from previous calls. You should take notes too include dates, times and person’s name you talked to, even employee number if possible. Again, be nice on how you ask and what you say and you should get a better receptive agent on the phone.
If you don’t want to deal with these issues, you may want to buy your insurance from a licensed insurance agent.
[17] Having a Good Agent
Having a good attentive insurance agent can help. An experienced agent (5 years+ full-time in the business) generally works on commission (paid by the insurance company). The agent should know how the business works and how to get things done for you. I prefer agents who are not tied to one insurance company’s products, but any agent who shows good customer service, good communication, follows through with issues, and calls you back timely is what you want.
The agent has a paid incentive to keep working with you. The agent gets a small residual income every year or month depending on the policy, their payout rate and the company’s pay period to maintain your policy. If the agent isn’t do the job, you can find another agent and ask if they want to be “agent of record” (how they get paid). You should not have to get a new policy unless it makes better sense to you. When it comes to healthcare switching to new policies could impact your premiums up or down depending on what the trade-offs are.
When I worked with a major Wall Street firm, we had relationships with most of the major insurance companies. I would get the insurance companies to compete for the client’s business and I handled any insurance problem the client had. Insurance companies knew they had a licensed expert on the phone, so I knew what to say and how to say it in order to get the results the client wanted within reason of course.
My experience as an agent, I had no problems talking to insurance companies on behalf of clients. All the insurance companies I worked with were very cooperative and friendly; maybe because I worked with a leading firm and we sent them lot of business.
As a consumer talking to insurance companies and acting as an advocate for some complex insurance issues, it was definitely more difficult, but I was able to get results because of my background. So having a good agent could be helpful.
Check out the Agent
Check out the insurance agent’s or insurance broker’s license number (and ask to see a government ID to match the name on the business card. A current driver’s license is a government ID). With the insurance license number (on their business card), you can contact your state government’s insurance regulator or licensing office. Check how long have they been in the insurance business and for any disciplinary issues too.
You don’t have to have an agent, and it won’t cost you more if you use an agent. The nice part is you have someone you can call and do some or most of the complicated work for you.
Article Series Index:
Part I: Health Insurance Basics
Part II: Choosing a Provider
Part III: HealthCare Planning
Part IV: Risks of Under-Insuring
Part V: The Truth About Health Insurance
Part VI: Navigators (Coming soon)
Part VII: How Your Health Insurance Rates Can Increase (Coming soon)
Part VIII: How to Profit from Your Insurance Company (Coming soon)
original article content, Copyright © 2014 NetAdvisor.org® All Rights Reserved.
Disclaimer: Post intended to be commentary from an insider’s view and based on actual experience working in and out of the industry. Poster’s licenses are currently inactive by personal choice. The information provided herein should not be deemed as specific investment, tax, insurance or legal advice. Rules and laws can change and thus opinions can change without further notice. Individual experiences and situations will vary. All of the data was accurate to the date of this post. Please contact your state or licensed appropriate person for specific advice for your specific needs.
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