Let’s dream for a second. Imagine a world where you are satisfied with your health insurance provider. You’re well-versed in the coverage it provides you, where your money goes each month, and there’s nothing shady happening behind the scenes that would fuel your distrust. It’s a nice dream, right?
Unfortunately, people are all too familiar with the ways health insurance companies rip off innocent people. In fact, frustration surrounding your services is probably so disheartening that you’d even prefer to deal with the cable company over your health insurance provider any day. It bodes well for you to become familiar with all the details of your coverage to thwart any potential rip-offs these companies may try to sneak by you.
They’ve been doing it for years. Here are eight of the most common ways health insurance companies try to scam you.
1. Denying claims
The Consumer Affairs reviews and complaint database houses countless tales of companies like United Health Care and Cigna denying consumers’ health claims way after the fact, leaving them stuck footing a bill you can’t afford.
The company may note a referral or pre-authorization was required for approval. Or they’re disputing non-covered charges. Either way, a warning that your service might be denied before contracting services is information that would have been useful, like, yesterday. Instead, customers receive notice of denial months later with an explanation that only makes things more confusing.
However, there are multiple reports that note patients can actually win about 50% of the cases they appeal. Unfortunately, it takes a lot of time and effort to fight back against denials, and the companies are hoping you simply give up.
Next: Why your policy is so confusing
2. Changing coverage with little notice
One of the most common complaints consumers have about health insurance companies ripping them off is a lack of notice for change of coverage. In reality, companies are required to notify you of changes, but that doesn’t mean the explanation is always clear.
In the same vein, insurers can also exclude certain treatments from coverage. Exclusions — like alternative medicine services — are likely spelled out in your policy, but detailed in fine print and riddled with jargon meant to confuse inquiring minds.
Some say healthcare monopolies do little to curb the issue. Because most Americans are faced with a lack of options, they must either scrounge for new coverage elsewhere, or deal with the ramifications of decreased coverage.
Next: Going to a doctor not in the “in crowd”
3. Employing out-of-network services
The fact that those covered by insurance must worry about out-of-network services seems counterintuitive. But if you have an emergency while on vacation, or change jobs (and, thus, insurance providers), you could get hit with out-of-network costs you never knew existed.
Insurance companies only make cost agreements with certain docs. Be careful when seeing doctors in a different state, or making appointments with local doctors not already “connected” with your insurer. It doesn’t matter if your procedure allows you to hit your deductible, you’ll be forced to pay the bill (read: penalty) regardless.
Next: Beware of hidden fees
4. Sneaking in unnecessary hidden fees
Your health insurer has been ripping off you and your employer with hidden fees for decades. Hi-Lex Controls, an automotive technology company, took Blue Cross Blue Shield of Michigan (BCBSM) to court in 2013 after discovering the company had been cheating them with hidden fees for 19 years. BCBSM documentation revealed the insurer inflated hospital claims by 22% under names such as “provider network fees,” “contingency fees,” “retiree surcharges,” and “other-than-group subsidy fees.”
Internal emails also showed the company went as far as to train its employees to downplay the hidden fees when questioned by customers. The judge reviewed the case and ordered BCBSM to stop charging the hidden fees and pay Hi-Lex $6.1 million.
Next: You have cheaper options
5. Ignoring that paying out-of-pocket can be cheaper
Insurance companies will never tell you there’s a cheaper option for your prescription drug medications. But remember, everyone’s trying to earn a dollar — including pharmacies that want to beat out sneaky insurance companies and turn a profit. Pharmacist Pete Spallito tells an NBC affiliate in Kansas City, Missouri, “Find out from several pharmacies what the cash price is and compare that with what your insurance copay is and you’ll be in a better position to determine what’s best for you.”
Other consumers find it interesting they can receive deep discounts if they forgo insurance altogether and pay in cash instead. The Wall Street Journal found common procedures such as MRIs and tonsillectomies are often cheaper when paying in cash. For example, a routine MRI in Colorado was $1,100 with insurance, compared to $600 with a cash payment.
And yet, Jeff Stelnik, senior vice president of strategy, sales and marketing at Blue Cross Blue Shield of Arizona, tells WSJ in the same article “That cases where cash rates are lower than its contracted rates are ‘very infrequent’ and that high-deductible plans ‘are a great opportunity for consumers to make their own decisions.’”
Next: The scam with prescription drugs
6. Over-inflating the costs of prescription drug service
Many assume that paying a premium for a prescription coverage plan means they’ll automatically receive the best prices. Unfortunately, that doesn’t always happen as there are no set costs for prescriptions. Consumer Reports found drugs could cost up to 10 times more at one retailer verses another. For example, survey results showed Cymbalta cost $44 at Costco, $118 at Walmart, and $220 at Walgreens.
Therefore, it’d be wise to compare prices and negotiate your medications at multiple stores to avoid such pricey scams.
Next: Premiums are only getting higher
7. Getting greedy with premiums
Health insurance companies blame Obamacare for their financial losses and have been using it as an excuse to raise premiums to an unbearable amount. Blue Cross Blue Shield once suggested Americans hurt their bottom line by visiting the emergency room excessively. Still, industry giant, UnitedHealth, announced record-breaking profits in 2015 and an even better 2016, according to a Consumer Affairs report. They earned a total of $184.4 billion.
But billion-dollar profits must not be enough. Bloomberg notes health-care costs are rising faster than most wage gains and that sky-high premiums are just another way these companies are gouging the American worker.
Premiums for employer-provided family insurance plans have climbed 19%, while worker pay increased only 12%. It’s a sickening cycle for both employers and their workers who are being forced to shoulder more of the costs than ever before. The average worker pays $5,714 for a family plan, 30% of the total $18,764 family premium cost.
8. Committing billing “errors”
Consumer Affairs is littered with reports of detailed accounts of terrible customer service, billing errors, and unkept promises made by customer service staff. Billing errors are rampant in the health care industry — and they’re not always remedied by the provider. Upcoding, unbundling, and double billing are all common ways health insurance providers can manipulate the coding system to make you pay more for services, according to AARP.
Keep detailed records of your dealings with your provider. And when a customer service person makes you a promise, get it in writing. Companies are well aware most Americans are too busy to go line-by-line through their medical bills and are willing to stretch the truth to get a higher payment rate from you.
Follow Lauren on Twitter @la_hamer.
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