Sick but insured? Think again!

Multicollinearity, BSN, RN · Sep 19, 2006

MTP,

I read the article and unfortunately I'm all too familiar with policy recissions. I was a health insurance broker for years.

Fact is, with an individual policy (not employer provided) if you have a significant claim within the first 2 years - watch out. That insurance company is going to get ALL your medical records going years back. If anything even remotely material was left off of your application...BAM you don't have insurance anymore. Canceled, and no other company will take you. There are many heartbroken and ruined lives because of this.

The article didn't really go into the issue of the vast number of policyholders who willfully and intentionally misrepresent information on their applications. Talking about the masses who purposedly commit insurance fraud wouldn't sell too many newspapers. I had a client do this about 10 years ago, and I swear I have some sort of quazi-PTSD from all the stress of depositions and lawyers and threats to my license. (The client said she told me about her serious lung condition while filling out the application. She did not. It came down to my word against her's and a few hundred thousand dollars of bills at issue.) My Liability Insurance tripled and evened out at $6500 per year. All because a person needed health insurance and got it the only way she knew to get it and get the care she needed - lie and say the agent (me) didn't write down the condition on the application. Of course people do this when they feel desperate and need care. Other cases are like in the article, where the policyholders are forthright - but forget some minor thing(s). That can come back to bite you and ruin your life under our current system.

I don't mean to go on about this. I see this as part of the larger issue of needing universal coverage. It only took me 10 years of health insurance broker hell to convert me into thinking we can do better, and that health coverage is one area that should be a fundamental right of US citizens. As long as we have a private insurance system there will be fraud on both sides, like described in this article. Fraud by insurance companies and fraud by the policy holders. The losers in this are the average citizens and the winners are the insurance corporations and companies.

TheCommuter, BSN, RN · Sep 19, 2006

Eleven months ago I had an MRI done on my pelvis and abdomen because the gynecologist suspected I had fibroid cysts and other reproductive anomalies. I was covered by two health insurance companies at that time, or so I had thought incorrectly. However, I received a $4,900 bill from the imaging company three months later as both insurance companies conjured up excuses and refused to pay the bill. I currently make monthly payments to this imaging company.

MarySunshine · Sep 19, 2006

Now I'm paranoid. I am really healthy and think I wrote down any "issues" I've ever had all the way down to seeing a chiropractor for some muscle soreness. So, if I suddenly come down with cancer or I'm in a car accident or something can they rake me over the coals if I didn't specify a UTI I had in 2003 or something equally irrelevent? What a system!

Multicollinearity, BSN, RN · Sep 19, 2006

Now I'm paranoid. I am really healthy and think I wrote down any "issues" I've ever had all the way down to seeing a chiropractor for some muscle soreness. So, if I suddenly come down with cancer or I'm in a car accident or something can they rake me over the coals if I didn't specify a UTI I had in 2003 or something equally irrelevent? What a system!

If you have an individual policy and have a significant claim within the first two years - YES you can have serious trouble. If whatever wasn't disclosed would have prevented the company from approving you, your policy is being rescinded. If some remote condition can be tied to the claim as pre-existing, you don't have coverage. So in other words, if you forgot to mention you had strep throat once in 1983, and you get in a car accident, your policy isn't going to be canceled. If you 'forget' that you are diabetic and don't disclose that - then have a heart attack (totally new health problem) your policy is being canceled because they wouldn't insure a diabetic. I hope this makes sense. The example in this article was a lump on the child's throat which turned out later to be serious. This is where the lawsuits come in, at any hint of a shade of gray.

Also, on these individual policies, let's say a few years into having your policy, you want to lower your deductible or add some sort of coverage. Start the clock ticking...another two years.

This does vary in intensity depending on what state you are in, since insurance is regulated by state and insurance commissioners are appointed by politicians. UGH -- do not shoot the messenger here -- I was licensed in many states so I know this first hand. Blue states have more consumer protection, overall compared to red states. As a result, blue states have the highest premiums but the most protection for the insurance consumer. Red states have the lowest premiums and the fewest rights for consumers. The health insurance companies (I'll only speak for individual health insurance, it's what I know) love the red states. They are so freeeee to do what they want to do in red states.

MarySunshine · Sep 19, 2006

So, what can you do to protect yourself, aside from trying to be upfront with your application?

Multicollinearity, BSN, RN · Sep 19, 2006

You write every single last rediculous thing down on your application. If an agent is filling out the application (required by many companies) you don't sign the application until you review it, and make sure every single last thing is disclosed. It can be absurd. Like you went to urgent care for a cold 8 years ago. That stupid. You get insurance from an insurance company that has a low complaint ratio from consumers (this info is on your state dep't of insurance website most of the time). You don't switch policies after you've had it for two years for another less expensive policy. Every time you switch policies your two-year contestability clock is ticking again. This is what most people do. They hop around to different companies because their rates go up so much. The insurance companies want you to hop around to different policies because during those first two years they can get out of paying many claims. You have a policy with a $5000 deductible because in most cases, these are the only policies that remain affordable every year when it comes to rate increases. You pray. In short, you do the best you can, because the current system is broken.