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Healthy Living

The Dread Of Returning To The Health Insurance Bad Old Days

Even if you are fortunate enough to have employer-provided health care insurance or the means to purchase coverage, the promise of a return to free market flexibility should arouse dread. After all, the beneficiary of the flexibility will be the insurance company, whose rewards will come at the expense of you the patient.

A true tale from the bad old days illustrates the danger that lies ahead. Some time ago, a new bookkeeper for a physical therapy outfit discovered an unpaid bill that was several years old. She sent the patient a letter with a $2,000 bill. The patient, having long believed that his insurance company had paid the bill, was shocked. In the interim, he had moved to Europe, where he had excellent state-provided insurance, and thus, no longer had a relationship with his former insurance company.

Unable to pay this balance, but believing that the therapist had been entitled to his insurance payment, the former patient undertook to determine why the insurance company did not pay the claim. Fast forward to the end of this tale: the claim remains unpaid, the provider continues to harass the former patient, and the former patient’s effort to address the matter has consumed countless hours of his time over more than a year.

Instructively, each encounter has highlighted a different feature of the past to which we can look forward if Republicans steamroll a repeal of the Obamacare regulations. First, the insurance company questioned whether the patient’s treatment was for a pre-existing condition excluded from coverage. As an athlete, the patient had indeed suffered many injuries. The patient’s orthopedist wrote a letter explaining this was a new condition. Next, on several occasions, the insurance company claimed it had not received the appropriate documentation of the treatment from the therapists. In trying to address the discrepancies, the patient was often unable to clarify whether the therapists had neglected the paperwork or the insurance company had mislaid the submission. What each made clear, however, was that they would not deal directly with one another: the physical therapist’s staff apparently preferred to harass the patient for payment, while the insurance company neither followed up with the provider nor notified the patient of a problem in processing the claim.

With the assertion of a pre-existing condition answered, the insurance company next tried to claim that the patient did not have continuous coverage. In fact, although his employment-related policy had terminated, having enrolled in graduate school at age 24, he had been able to seamlessly transition, without a gap, to the very same insurance policy with the same company under his parent’s plan. Of course, the insurance company claimed that it could not access their own two separate policies. Instead, it tasked the patient with providing documentation. They then suggested the patient file an appeal to expedite the claim processing.

In the latest development, the patient called from abroad regarding the status of the appeal only to learn the insurance company had summarily withdrawn the appeal without notifying him. After lengthy conversations, including one disconnection, it appeared that a clerical mistake resulted in recording an incorrect case number. After correcting the error, the insurance company employee then noted that the file was incomplete, among other things it did not contain the dates of treatment—data that had previously been provided on several occasions.

Returning flexibility to insurance companies will not only allow them to raise rates, but also restore to them a catalogue of reasons to refuse to pay the claims of those who can afford to buy a policy. The unregulated market will also enable companies to invent procedural hoops for claimants, any one of which can derail a claim. Rather than moving towards reducing the administrative burden on health providers, Trumpcare appears headed to create a market in which providers and insurance companies vie to maximize their income by squeezing the consumer.

Regardless of who eventually “wins” in this cautionary tale, from a treatment perspective it does not have a happy ending. Given the system’s incentives, the prospect of continued insurance payments likely influenced the therapist to continue treatments without evaluating their effectiveness. For the patient, the belief that the treatments were covered by insurance allowed him to hope that they would eventually improve his condition. Alas, they did not. The treatments were a waste of time; and now so are countless hours he is spending to secure payment for the provider.

In the bad old days, millions of people went uninsured; and those with insurance often failed to get what they paid for.