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doi: 10.1097/01.HEARTI.0000346513.31522.fc
Features: Heart-To-Heart

Health Insurance Issues Can Cost You Plenty

Patton, Carol

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How To Navigate The Maze And Get What's Coming To You

My husband, Jimmy, and I thought we were pretty savvy about health insurance, considering he was a hospital CEO and I am an experienced health and medical journalist. But when a health crisis struck, we soon discovered we had a lot to more learn.

Nearly eight years ago, Jimmy was diagnosed with two serious heart conditions that left him disabled — cardiomyopathy (see page 8) and heart failure. Insurance issues began to surface right away: “What do you mean his annual pharmacy benefit has expired? It's only August!”; “Why does he have to wait two months to see his cardiologist?”; “Why can't we change doctors?” Our frustration grew steadily as we began to deal with health plan policies that either delayed or restricted access to the care he needed.

The list of problems people commonly experience with health insurance companies may seem endless. While not every problem can be resolved to your satisfaction, here's what we learned — the hard way — about how to work with a health insurance company to receive the services to which you are entitled under your plan.

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“[A common] problem for everybody is a claim isn't paid,” says Karen Pollitz, M.P.P., project director for the Health Policy Institute at Washington, D.C.'s Georgetown University. “Oftentimes, you need to go on a little bit of a detective hunt to figure out why.” Start by calling your insurance company. It may be something simple, like your physician's office entered the incorrect medical service code or got your birth date wrong on the insurance form, and your doctor need only resubmit the corrected claim.

But keep in mind that claims will be denied for treatments not covered by your plan, notes Alwyn Cassil, director of public affairs at Center for Studying Health System Change, a nonpartisan Washington, D.C., healthcare policy think tank. “It doesn't matter who tells you that you need it, it won't be covered. It's black letter law” — meaning, you won't have a leg to stand on if you appeal the decision, contact your state insurance board or take your dispute to court.

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Some types of diagnostic testing, therapy or surgery require pre-approval from your health plan. Don't assume your physician is taking care of it — ultimately, it's your responsibility. Without the pre-approval, your insurance company is within its rights to cover only a portion of the cost, or none of it. Before agreeing to a test or treatment, make sure you understand what your policy will cover and what authorizations you need, says Cassil.

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If your claim is denied because the insurer did not authorize a procedure that it does not consider “medically necessary,” don't panic — you still have a couple of options. First, write a letter that succinctly describes the problem — and be polite, recommends Bob Scott, an attorney in Irvine, CA, who is a member of the group insurance committee of the California State Bar.

Scott says the key to success is to direct your letter to the right person. Aim too high — the company president, for example — and the response will be delegated to an assistant, and possibly back-burnered. Aim too low — say, a customer service representative — and your letter will be in the hands of someone who has no decision-making authority to solve your problem. Shoot for someone in between, says Scott: “You need to get to the director of clinical care, who oversees all of the [doctors].”

If you get no response, or just a glad-handing form letter for your trouble, you need to escalate. “Look at what your appeal rights are under your plan, and pursue them,” advises Pollitz. Ask your doctor to follow those procedures to file an appeal on your behalf. You may not prevail the first time — or even the second — but don't take “no” for an answer, even if you end up filing multiple appeals, says Pollitz.

“In [our] studies, we found that health plans will uphold their own denial throughout every level of their appeals process,” Pollitz says. “But when you go through [the] appeals process, patients win about half the time.”

You should also check with your state insurance department or attorney general's office to see whether there is an ombudsman program that can help add muscle to your appeal (see sidebar).

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Rising insurance premiums, deductibles and even co-pays for doctor's visits or medicine can wreak havoc on anyone's budget, but there are ways you can reduce out-of-pocket expenses. Start by contacting groups that can help you negotiate fees with providers, file appeals or get prescription drugs at much lower costs (see sidebar).

If your insurance premiums are taking too big a bite out of your budget, look into group plans that are offered by professional groups, unions, trade associations and even chambers of commerce to see if you can get a better deal. Chances are, you will be able to find a group that will accept you as a member.

Annual deductibles can also be tricky. Once you reach whatever amount of out-of-pocket expenses your plan sets as a maximum threshold, the rest of your medical costs for the year will be covered in full, minus co-pays. But with many plans there is a trade-off: You pay lower monthly premiums, but the annual threshold is higher, or vice versa. And there's a catch: “Out-of-pocket maximums [usually] apply to in-network services,” warns Cheryl Fish-Parcham, deputy director of health policy at Families USA in Washington, D.C. So out-of-pocket costs incurred to visit out of network doctors don't “count” toward your annual deductible.

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All health plans limit the amount of coverage you can receive during your lifetime, says Scott. The same holds true with pharmacy benefits, except the restriction is annual and every year you start over with a clean slate.

If you've exhausted your pharmacy benefits before the year is up, you can file an appeal with the person in charge of your health plan's prescription drug policy, says Scott. “It doesn't hurt to ask for a hardship exception. You're playing this one outside the box because it's not the normal appeals request.” He also suggests asking your pharmacist about a state drug program or pharmaceutical industry program that can help defray the cost of your medication significantly until your pharmacy benefits kick in again at the start of the year. These programs are usually means-tested, and you may need to supply tax forms or other proof of income.

Things get trickier when your medical expenses have reached your policy's lifetime cap. Although lifetime caps are written in stone, health plans are required by law to notify you when you have used approximately 75 percent of your benefits, Scott says. If you were not warned and exceed your benefits, health insurers cannot collect payment for the excess expenditures by law.

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If you cannot find the specialist you need within your network or the service area covered by your plan, your insurer will likely allow you to see an out-of-network specialist for the same cost as an in-network specialist, says Fish-Parcham. In addition, “about one-third of states have laws that allow you to go out of network,” she explains, citing Colorado, Maine and Maryland as examples. In these states, “the insurance company has to pay for [the visit], and the amount you pay [must be] what you would pay in network.”

If you do need to see an out-of-network specialist, or one who practices outside your service area, contact your health plan or your company's employee benefit office for authorization. You may be asked to provide a letter from your doctor providing a medical justification for the request.

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The list of FDA-approved medications covered by a particular prescription benefit plan is called a “formulary.” Most formularies divide drugs into three categories: brand name, preferred (selected brand name drugs that the plan buys in bulk from the manufacturer at a special rate) and generic. Your out-of-pocket costs are set accordingly under a system known as “reference pricing” — for example, your co-pay for a generic drug may be $3 or $4; $10 to $20 for a preferred drug; and $50 or even the entire cost for brand name drugs.

To save money, an insurance company periodically changes its formulary, and you may find that a drug that was previously covered has been dropped from the list, meaning you will have to pay for it yourself. In most cases, your best bet is to switch to a preferred or generic drug that is in the formulary.

In addition, comparison shop to see which pharmacy offers the lowest prices on your prescriptions. A cost comparison of five popular prescription drugs by the editors of the Web site “How Stuff Works” found that independent pharmacies had the highest prices, while mail-order and Internet pharmacies had the best prices. National “big box” and warehouse retailers, pharmacy chains and supermarkets were in between the two ends of the cost spectrum. In some cases, there was as much as a 25 percent price difference for the same medication.

However, if your doctor insists that you take a medication that is not included in your plan's formulary, you may still be able to get your plan to cover it if there is concrete proof of its superior efficacy or safety, as compared to the generic or preferred alternative, says attorney Gerry Goldsholle, founder of, a Web site that offers free information about insurance and legal matters.

“You have to demonstrate to the insurance company that the reason why you wish to use a drug that's off formulary is that it's medically necessary,” Goldsholle says, adding that insurance companies are on the lookout for what they consider psychosomatic complaints. “If you break out in hives or have a serious [side effect] after a day or two, notify your doctor.” Chances are, you will need to keep trying generic alternatives until you find one that doesn't cause a negative reaction. If none of them work out, then you may have a case.

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If you're traveling out of state and become ill or injured, “insurance policies will have a provision either for emergency [life-threatening] or urgent care out of area,” reassures Cheryl Matheis, senior vice president of health strategy at AARP. “Become familiar with the provisions of your policy. Find out in advance which health care providers you can go to.”

Some insurers have reciprocal arrangements with hospitals nationwide, and will cover treatment by out-of-network doctors and specialists in such circumstances.

However, if you develop a sinus infection or other ailment that is not life-threatening Matheis urges you to avoid hospital emergency rooms and to get treated at a clinic — she recommends those at national drugstore chains, because they are staffed by nurse practitioners who can handle minor health complaints at a reasonable cost.

Before your trip, review your policy, and call your insurer's customer service department to get the necessary toll-free numbers and instructions for accessing out-of-area services.

One final note: Be prepared to pay cash for medical services if you're out of the country, advises Scott, explaining, “Austria doesn't know what your Blue Cross insurance card looks like.” He adds that by law, insurance companies must reimburse you for medical expenses related to urgent or life-threatening care, even if those expenses are incurred in a foreign country.

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When a patient files a claim for an expensive procedure, some insurance companies will examine his or her application for coverage and all previous claims with a fine-tooth comb to look for fraud or “misstatements” that justify cancelling the policy. “Some companies have created a special unit designed to examine in detail the applications of individuals who file large claims,” says Goldsholle, adding that such “post-claim underwriting” is illegal in most states.

“If you are rejected — even if the insurance company claims fraud or misstatement — don't accept the rejection at face value,” urges Goldsholle. “Were your answers to the questionnaire reasonable? Did you intend to mislead them? Is the amount involved serious and significant? If so, it makes sense to speak to an attorney familiar with health insurance.”

If your policy is retroactively rescinded, you will receive a reimbursement check for the full amount of premiums you paid, Goldsholle says, warning that if you cash the check you are accepting your health plan's decision. “Under all circumstances, fight for your rights.”

Unfortunately, no health insurance plan is perfect, and not every insurance problem is easily fixable. If you understand your policy and play by your plan's rules — and know how to make those rules work in your favor — you'll get the most bang for your insurance buck.

Our insurance saga had a happy ending: After hitting one brick wall after another, Jimmy and I wrote a letter to his plan's vice president of clinical services and explained the trouble we were having with scheduling timely appointments, the high rate of primary care physician turnover and doctors' offices forgetting to call in referrals or prescriptions into the pharmacy even after repeated reminders from us. The vice president called and spent an hour discussing our issues, and even set Jimmy up with a new primary care physician.

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Helping Hands

The following resources offer assistance with health insurance issues and costs:

American Heart Association

The Access Project 617-654-9911

Chronic Disease Fund 877-968-7233

Families USA

The HealthWell Foundation 800-675-8416

Partnership for Prescription Assistance 888-477-2669

Patient Advocate Foundation 800-532-5274

The National Association of Insurance Commissioners 816-842-3600

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Nearly two-thirds of adults in this country — an estimated 116 million people — struggled to pay medical bills or went without needed care because of cost, according to the 2007 Commonwealth Fund Biennial Health Insurance Survey.

The Commonwealth Fund, a private foundation that researches healthcare policies and practices to promote greater access to treatment for those who are low income or uninsured, as well as children and the elderly, found that the proportion of Americans who are struggling to pay medical debts rose from 34 percent to 41 percent (72 million in all) since its previous survey in 2005.

“Because of medical bills or accumulated medical debt, an estimated 28 million adults reported they used up all their savings, 21 million incurred large credit card debt, and another 21 million were unable to pay for basic necessities,” according to the executive summary of the survey results. A particularly troubling finding is that 61 percent of those paying off onerous sums for out-of-pocket medical costs had health insurance.

© 2009 American Heart Association, Inc.