Ask Wendell: How do I deal with a lying insurer?
Insured do have recourses when they are misled
Today we continue our "Ask Wendell" series with a bit of guidance from a former insider — that would be me — on how to interact with insurance companies and hopefully hold them accountable for their actions.
I'm the founder of a small business, and we don't yet have a company plan. Last year (2010) I wanted to raise my deductible from $2,500 to $7,500, which would lower the monthly premium from $1,100 to $550. When I called to speak to a customer service person at my insurer here in California, the lady told me that she could "grandfather" me into my current plan. If not I would have to go with the Obama-sponsored plan. She talked extensively about how the Obama plan would be bad for me, that there are so many "unknowns" that it would be much "safer" to be "grandfathered" in. So, after her strong persuasive argument, I indeed went with her suggestion.
Now a year later, my wife called in to see why her annual "well-woman" exam wasn't covered. They told her, "Your husband elected to stay with the current plan; if he had chosen the Obama plan, it would have covered your annual check up." And she told my wife that since she is now pregnant, the policy would not cover anesthesia or baby care since she has a pre-existing condition (pregnancy). In other words, they lied and they aren't covering us. What can we do when the insurance company you are paying is all about lying and cheating?
I'm sorry to hear you're facing having to pay a lot of expenses out of your own pocket because the customer service rep talked you into staying in a plan that is not meeting your needs. I believe, though, that if you file an appeal with your insurer — and also contact California Insurance Commissioner Dave Jones — you might be able to get coverage for your wife's pregnancy-related expenses and for her well-woman exam as well.
First of all, there is no such thing as an Obama plan, so if the customer service rep characterized any policy offered by your insurer as an Obama plan, she was misleading you. In 2014, all polices offered by health insurers will have to cover "essential benefits," but the Department of Health and Human Services has not yet determined what those essential benefits will be.
That said, the Affordable Care Act allows insurers to continue offering plans that are exempted from most provisions of the new law — including those that have already gone into effect — so long as the insurers do not substantially change the benefits, premiums and copayments. Such plans are given "grandfathered" status. So if you indeed did stay in a grandfathered plan that had been providing coverage for well-woman exams and maternity-related expenses, it should still cover them.
If your current policy was in effect when your wife became pregnant — and it surely must have been if you made the decision in 2010 not to change plans — it would be hard for your insurer to claim her pregnancy was a pre-existing condition. I can see how the company could refuse to cover maternity expenses if you had changed plans after your wife became pregnant, but unless she has been pregnant since late 2010 — not likely, considering we're now in mid-October — you should challenge your insurer on this.
From now on, record all the conversations you have with any representative of your insurer. Tell them up front that you are recording the calls "for quality assurance purposes" and also that you plan to file a complaint with the Department of Insurance — and then do it. If the customer service representative used the language you said she used to dissuade you from changing plans, the Department of Insurance should launch an investigation, in my opinion. It might turn out that your customer service rep told you what you said she told you without any direction from her supervisor. That's something the insurance commissioner should try to find out.
But know this: in most cases, it is to an insurer's advantage to keep people in grandfathered plans as long as possible. Among other things, grandfathered plans do not have to allow young adults to stay on their parents' policies until they turn 26 if they can't find jobs that offer health care benefits by then. And grandfathered plans can continue to set lifetime coverage limits.
My suggestion that you record all conversations with your insurer is something I suggest everyone do when they are on the phone with a customer service rep or anyone else at the company, for that matter. If you can't record the calls, at least take extensive notes. They will come in handy if you file an appeal with the company or a complaint with your insurance commissioner.
The situation you described is just one reason why it is so important for every state to establish a health insurance "exchange" — or marketplace — where individuals and small business owners can get factual and comparable information about all the policies available to them. Under the Affordable Care Act, states must have their exchanges up and running by 2014, and insurers will be required to provide straightforward information about the benefits and costs of their various plans offered on the exchanges. This will enable consumers to make apples to apples comparisons between policies for the first time. We will no longer have to rely on the trustworthiness of customer service representatives who, rest assured, will always be thinking first and foremost about what is in the best interest of their employers, not yours.