The Facts: Health Insurance Tactics
Health Insurance Tactics: HEALTH INSURANCE COMPANIES KEEP THEIR COSTS LOW AND PROFITS HIGH
Confusing Consumers With a Numbers Game.Here are the Current Practices:
Suppose your health insurance coverage for out-of-network services is based on a 70/30 coinsurance benefit design. In this scenario you would assume that you would pay 30 percent of the amount billed for a medical service. If your physician files a $1,000 claim to the health plan for an out-of-network service, your assumption is the health plan will pay $700 and you will pay $300 (30 percent). However, this is not the case. Health plans pay their percentage of the claim based on what they think the service is worth, what they call the “maximum allowable amount,” for that particular medical service. So for a $1,000 claim, the maximum allowable amount could be $530. This means that the insurance pays 70% of $530, which is only $374. The remaining portion of the $1000 charge is left up to the patient, a whopping $626. Surprised?
DOCUMENTED CASES OF ILLEGALLY LOW PAYMENTS
Just recently, in September 2015, New Jersey Department of Banking and Insurance issued an order against United Healthcare for INCORRECTLY SHOWING THE NETWORK COST SHARING AMOUNTS FOR OUTPATIENT SURGERY, FACILITY FEES AND OUTPATIENTSURGERY, AND PHYSICIAN/SURGEON FEES. This means that the company failed to advise patients of their actual payment responsibilities. In addition, the Department stated that it had “received consumer complaints against UHC regarding balance billing and other collection activity by out-of-network providers, including filing of lawsuits” because of UHC’s underpayment to many of New Jersey’s best physicians.
Similarly, in 2009, the New Jersey Department of Banking and Insurance issued Consent Order #C09-102 on November 12, 2009; Aetna reported to the Department that from October 2002 through September 2009 it improperly processed out-of-network hospital and non-hospital facility claims for persons covered under individual health coverage (IHC) and small employer health (SEH) contracts. Aetna had to reprocess all affected claims to remedy underpayments, including 12% interest.
New Jersey has a surprisingly small amount of health insurance carriers. And, we fall into the top 10 states with competition going down! “We find that the majority of U.S. commercial health insurance markets are highly concentrated. These markets are ripe for the exercise of health insurer market power, which harms consumers and providers of care.”1 A1952 will only help the handful of health insurance companies in New Jersey do even better. Premiums will continue to rise, while your ACCESS TO CARE will continue to suffer. _________________________________________________ 1American Medical Association, Competition in health insurance: A comprehensive study of U.S. markets, 2016 Update, page 8
PATIENTS ARE NOT PRIORITIZED
Carriers are doing very well and have very large reserves of money, even the non-profits. Insurers have developed a range of interventionist strategies and tools to reduce their cost and increase revenue, “such as selective contracting with networks of providers (PPOs or IPAs); utilization review - for example, prior authorization of non-emergent hospital admissions and aggressive review of lengths of hospital stay; pharmaceutical benefits management; introduction of practice guidelines and physician profiling; and outright acquisition or formation of health maintenance organizations (HMOs) and point-of-service plans (POS).” The Rise of Managed Care in the United States: Lessons for French Health Policy. Victor G. Rodwin, Health Policy Reform, National Schemes and Globalization. 1997