Pay Your Health Insurance Way Before It’s Due, A Cautionary Tale

Getting health insurance held up by bureaucratic red tape is one thing… but magnetic tape?

Jacob writes:

    I am writing this email while on hold for EBCBS customer service, The average wait for these calls has been 30-40 minutes per call, and this is my 4th or 5th call.

    This all started when I sent my premium payment of $221 by check on the 26th of December. Due to New Years weekend, new year’s day, and then president Fords death, my check was not deposited until 1/6/07.

    Taking all ‘grace’ out of ‘grace period’ Empire deactivated my coverage. I didn’t find that out until I was at my Pharmacy trying to pick up refill for an Anti-depressant and synthetic thyroid hormone (a pill I must take every day for the rest of my life because I had my thyroid removed for cancer at age 26)

Jacob continues:

    “1st call 1/5- I spent an hour getting through to Empire, they had received and deposited my check but were sitting around for me to call to ‘credit’ the account, they updated my account and told me everything was active again.

    1/8 – Returned to Pharmacy, informed STILL no drug coverage. Called Care-Mark (Empires EXCLUSIVE vendor for RX coverage) and in their system I was still listed as INACTIVE.

    Learned through a lengthy conversation with Care-Mark rep that they work on a old system that ‘downloads’ data sent from Empire via a MAGNETIC TAPE SYSTEM that is constantly back-logged with updates. She could see in my record that my empire coverage was active but had not received the ARCANE BIT OF DATA from Empire to reinstate RX coverage. Rep assured me that when the creaking system did its Flintstonian magic overnight, I should be active in the morning.

    1/9 – Called Pharmacist, STILL NO GO. Called Empire (30-40 minute wait) was told now that the reason they haven’t cleared me with Care-Mark is because, despite having my money, they had cut a refund check for my premium (my coverage was cancelled, remember) that was lost somewhere in the billing department. Basically, they were afraid of accidentally giving me some money (that in worst-case-scenario they could have billed me back for) and were therefore denying me RX coverage until the billing dept. could locate THIER OWN check.

    1/10 – Out of physical necessity, I go to Pharmacy and PAY OUT OF POCKET $142 for my meds. Target Pharmacy at the Atlantic Center (They are incredibly nice and helpful, really!) says they can credit me back when my insurance becomes active w/in 14 days.

    1/11 – Insult to Injury – Receive my new bill from Empire, and instead of 1 month due (they had deposited and credited all payments up until now) I have a bill for $671.18 – That’s for Feb PLUS DECEMBER AND JANUARY- AGAIN!

    So I have finished my current account of the matter, and I swear to god, I am still on HOLD with the MF’ers. I hope this story is of value to your readers and thank you for creating this wonderful site.

    Warmly, Jacob”



Edit Your Comment

  1. TheUpMyAssPlayers says:

    Jesus Christ, corporate america sucks so hard. I mean sure I already knew this but it’s still infuriating to read about.

    Jacob I feel your pain and am glad you survived the cancer.

  2. BCBS kept telling my doctors I didn’t have coverage even when they were being paid on time through my employer. They did this for 7 months.

    Stay on them about this because they do not think it’s important to fix their errors quickly.

  3. kerry says:

    A coworker of mine was billed for her pre-employment physical by the hospital we work for. It was performed by the hospital, at the hospital, as a mandatory part of the employment process. It took her *years* to get them to figure out that she wasn’t required to pay for it.
    Healthcare is broken.

  4. Shiver999 says:

    Come move up here to glorious Canada, where the drugs flow like water!!

  5. phrygian says:

    Aetna constantly tells my doctors that I don’t have secondary coverage through them, even though I have them for both primary and secondary coverage. They do the same thing to my husband’s doctors. I think it’s in the business plans of insurance companies to tell boldfaced lies for as long as it takes for you to go away…

  6. mishakim says:

    Complain to your attorney general, or whatever state agency regulates insurance in your state. I can only speak to my experiences here in Mass., but this is the sort of thing they will follow up on and get resolution. (In Mass: Div. of Ins. sets rates, Ins. Div. of AG enforces coverage & payment issues)

  7. revmatty says:

    Several of my coworkers used to contract at a large insurance company here. The Claims Processors were required to deny a certain percentage of claims each month regardless of merit (there were differing theories as to what the percentage was, somewhere between 10 and 13%).

    In addition, they as a matter of policy denied any claims for non-routine care. My boss had a child with severe birth defects and every month had to spend 10-12 hours on the phone arguing about the claims. They ultimately always admitted the claims should’ve been covered and paid them, but only after he spent days on the phone with them about it.

  8. Sir Winston Thriller says:

    My boss switched from one type of CIGNA health insurance to another type from CIGNA. When folks started going to their doctors, CIGNA denied coverage. They determined that whatever the reason for seeing the doctor, it was a pre-existing condition and until the employee faxed in a Certificate of Creditable Coverage (from CIGNA), they would have to pay out of pocket.

    Health Insurance in the USA is Broke.

  9. My wife works in a medical lab and yesterday a doctor sent over paperwork for a test that is under normal circumstances (patient has to have certain existing conditions)not covered by insurance. My wife knew the claim would be denied and her lab would have to eat the cost.

    She called the doctor about it and after berating my wife, the doctor told her if she was going to hassle him about it he was going to pay the cost.

    When he asked the cost, my wife replied 480 dollars and the doctor realized the woman did not need that particular test.

  10. misskaz says:

    My boyfriend has been fighting BCBS to cover a visit to the emergency room after he passed out while eating lunch with coworkers. He gets several barely comprehensible letters a week from BCBS saying they need some additional information from him or the doctor or God or something. They first claimed that his fainting was a pre-existing condition even though he had never passed out before, and that they’d need a certificate of continuing coverage from his former employer’s health insurer (Aetna) to cover it. He has since supplied this (despite it not actually being a pre-existing condition) and he is still getting bills from the hospital, the doctor that he saw for a follow up, and the ambulance service. The original incident happened in October. He just got another letter from BCBS saying they needed the certificate of coverage. He already sent one months ago. The whole thing is completely insane.

    I cannot tell you how much I agree with the others that say the health care system in the U.S. is broken. And we’re lucky enough to have (supposedly) good coverage from our employers! What about those poor saps that don’t?

  11. acambras says:

    And we’re lucky enough to have (supposedly) good coverage from our employers! What about those poor saps that don’t?

    Well, it looks like Schwarzenegger has a “plan” for uninsured Californians — make them buy insurance.

    So — problem solved, right? Thanks, Governor!

  12. aujahlisa says:

    I live in fear of the day that insurance companies realize that life is a pre-existing condition and attempt to deny any coverage at all.

    Somethings that we premium payers rarely think about. Insurance companies are not beneficent organizations. They are out there to make a profit. Any claim paid is a profit check reduced. I am not claiming any sympathy for the insurance companies. I’m just stating a brutally learned lesson. In a nutshell, I went through chemo on COBRA, they denied the stat liver biopsy that finally diagnosed my cancer (Doc said cured!), and right after my last chemo, they denied a blood transfusion because ONE line on the bill said “clinic” and told me to tell the hospital to resubmit without that line. The salt in that wound was that it was a Directed Donation from my mother. (grrr….)

    Anyway. The guy who posted this story is right. NEVER assume that your check got there. The administrators are under no obligation to contact you to say “where’s your check?” Particularly you people on COBRA. I recommend registered or certified mail if you can afford it. I lost my COBRA coverage because they claimed I hadn’t mailed in a payment. My only notification was 5 months later when I got the notice of termination due to non-payment.
    My lessons? Send important documents with tracking numbers, and balance my &%$@!*# checkbook. If I had been paying closer attention to the monthly statements from the bank, I might have been able to catch that in time.

  13. JoeConsumer says:

    acambras says:

    And we’re lucky enough to have (supposedly) good coverage from our employers! What about those poor saps that don’t?

    Well, it looks like Schwarzenegger has a “plan” for uninsured Californians — make them buy insurance.

    So — problem solved, right? Thanks, Governor!

    DAMN STRAIGHT it is. You have no idea what insurance in like in California.

    Right now I am trying to get my girlfriend medical insurance. To shorten the story to an internet sized bite, she can not get insurance.

    I make near 100k a year and CAN NOT but her insurance. She is can not get any because she is sick.

    When insurance is not available to a person no matter the price the system is broken.

    I hope the California plan goes though. I am more fortunate than any person should be. I can only imagine the suffering of people who make normal salaries that get Ill.

  14. Insurance_Consultant says:

    When you have service issues such as these… Threaten the insurance company that you will be making a complaint with your states Department Of Insurance (DOI). EVERY state has a DOI that regulates and watches over insurance companies that do business in that state. You can find complaint forms on the DOI websites, which are usually on the state government website. If an insurance company knows whats good for them, then they should fix your problem, rather than have the DOI on there A$#!!

  15. canuckistan says:

    I feel so very bad for you. For living in America and all.

    It’s just like the time I got very sick and received free and excellent health care regardless of my income. Oh wait, that’s only in civilized countries that don’t put the bottom dollar above human life. So not America.

  16. acambras says:

    Yeah, my understanding is that COBRA is only around because of — literally — an Act of Congress, and that the insurance companies would never provide such coverage if they weren’t required to. And they would just love for you to slip up and be late with a payment, so they can be released from that obligation to continue your coverage.

    And if I remember correctly, if you have a lapse of coverage lasting 61+ days, you are subject to medical underwriting. What that means is that when you DO get coverage again, the insurance company can exclude coverage for pre-existing conditions or anything that they can link (in their judgement) to a pre-existing condition. That’s what those certificates of continuous coverage are all about.

    I think that, in general, insurance companies count on their policyholders to be poor recordkeepers, either missing payments or submitting them late because of disorganization, or giving up on a claim because you’re too sick and exhausted to fight. One slip-up and you lose. They are evil.

  17. mediamatt says:

    Unfortunately, dealing with an insurance company is no better than dealing with the government or any other large corporation.
    When things like this happen you should call the agent you (or your employer) bought the coverage through. Often they know how to push things through or who to call to escalate things when needed.

  18. curlyheatherg says:

    Oh yes, so evil…but also non-profit. At least, I know BCBS is a non-profit, I have a friend who works there. All they have to do is break even. In a way this is worse. He can tell you stories of ineffiencies that will make your hair stand on end: spending millions on a new database and then abandoning it, training problems, never firing anyone no matter how worthless, and on and on.

  19. raindog says:

    I have BCBS too. After a few years of experimentation, I have deduced that it takes them 9 DAYS from when they receive my check to when they credit my account. So unless I mail it out pretty much the same day I get paid (I only pay myself once a month, once our clients’ checks have come in) I’m kinda screwed.

    One time I sent it out on the 31st and I ended up having to fedex a check directly to whoever it was that was in charge of crediting the account, and letting the original check cover the next month. Of course, with my monthly insurance bill being about 800 bucks, I could probably afford the Fedex fee each month on top of it, but I’m guessing they wouldn’t let me do that every month.

    What a racket.

  20. slapshot24 says:

    It seems to depend a lot on the carrier. I had COBRA through an old employer and they were very strict about the details. On the other hand, I also had BCBS coverage for a while and they seemed very lenient. I don’t know if it’s a difference across the carriers, or if they try to calculate an “is this a good customer” score.

  21. smallbusinssvcs says:

    I have been a health insurance broker for over a decade and every day I read more and more “horror” stories that are posted on the internet regarding insurance companies not paying claims, refusing to cover specific illnesses and physician’s not getting reimbursed. Unfortunately, the reality is that insurance companies are driven by profits, not people. If the insurance company can find a legal reason not to pay for something, chances are they will find it, and you, the CONSUMER will suffer. However, what many people fail to realize, is that there are very few “loopholes” in an insurance policy. The majority of the time, when health insurance is purchased, the prospective insured doesn’t even know what kind of coverage the policy is providing, so there is really no need for the insurance company to try to use a “loophole” to get out of paying for something. Any insurance agent will tell you, that the terms of coverage are right in your policy, along with a copy of the application that you signed agreeing to those terms. Most people, as soon as they get their policy, put their insurance cards in their wallet and throw their insurance policy in a drawer or filing cabinet. No one really takes the time to look through their 47-82 page policy. Therefore, since the insurance company is counting on you NOT to read your policy, no “loopholes” are actually needed for the insurance company to get out of paying a claim. Your insurance company will tell you that your policy is a legally binding contract and that you had 10 days to cancel (a 10 day free look period) when you received it, if you weren’t happy with the terms of your coverage.

    So do most policy holders really know what is in their 47-82 page health insurance policy? Yes, lots of confusing insurance jargon. Sure, the average policy holder could probably tell you how much their monthly premiums are, but can they tell you what their insurance policy doesn’t cover? Usually the policy holder doesn’t even realize what their policy doesn’t cover until they file a claim and receive a “denial letter” from the insurance company.

    Unlike car buying, where the buyer knows that the engine and transmission are standard, and that power windows and cruise control are optional, health insurance is a maze of confusion. Unfortunately, many health plans are purposefully designed to offer “limited” standard benefits. Often, coverage for other medical expenses, like “maternity” and “organ transplant” coverage are optional. Usually a policy holder doesn’t even realize that their policy doesn’t cover something “important” until they undergo medical treatment and then receive a huge bill from the hospital stating that “benefits were denied.”

    Yes, we all complain about insurance companies, but we all know that they serve a “necessary evil.” Very few of us could afford to pay for open heart surgery, if we needed it, without insurance. This being the case, how can YOU, the consumer, protect yourself against the big, bad, greedy insurance companies? And, how will you know if you are truly getting the best plan for the lowest price? Simple…buy the type of health insurance plan that you really “NEED.”

    Sure, everyone wants to have affordable, quality health insurance coverage, but in my experience, particularly dealing with the small business and self-employed market, very few people individuals can distinguish between the benefits they “want” and the benefits they really “NEED.’

    I have read many comments on various blogs about plans that cover 100% (no deductible and no-coinsurance) and I agree that those types of plans have a great “curb appeal.” However, I would not recommend to anyone that they work overtime and give up time with your family just so they could afford a plan with 100% coverage. Do those types of plans offer the policy holder greater peace of mind? Absolutely! But is 100% coverage something that the policy holder really needs? Probably not!

    Just like you would do, if you were purchasing options for a new car, you would have to weigh your “wants” vs. your “needs.” For example, although heated seats are a nice optional feature, “Do you really need heated seats if you live in Arizona?” Not unless you are planning to frequently drive to Alaska! So if you are healthy, take no medications and rarely go to the doctor, do you really need a plan with 100% coverage, and a $5 co-payment for prescription drugs? Is it really worth paying for this “option” if it costs you an additional $300 a month in insurance premiums to have this type of coverage?

    Or, is it worth $200 more a month to have a $250 deductible and a full drug card vs. an 80/20 plan with a $1,000 deductible and a discount drug card. Wouldn’t the 80/20 plan still offer you adequate coverage? Don’t you think it would be better to put that extra $200 ($2,400 per year) that you would be giving to the insurance company in premiums in your own bank account, just in case, something happens in the future and you have to pay your $1,000 deductible or buy a $12 Amoxicillin prescription? Don’t you think it is wiser to keep your hard-earned money rather than handing it over to the insurance company? Remember, the insurance company offers you NO REFUNDS on insurance premiums if you stay healthy.

    In my experience, this is one of the primary reasons that most people I speak to feel like they have been defrauded or “ripped-off” by their insurance company and/or insurance agent. In fact, time and time again I hear almost identical comments from every business owner that I speak to. Comments such as, “I have to run my business; I don’t have to be sick!” “I think I have gone to the doctor two times in the last five years.” “My insurance company keeps raising my rates and I don’t even use my insurance?”

    As a business owner myself, I can understand their frustration. Many business owners complain that it is not easy to determine what type of health insurance coverage they really need. So, is there a simple, secret formula that everyone can follow to make health insurance buying easier? Yes! Become an INFORMED Consumer. Every time I contact a prospective client or call one of my client referrals, I ask a handful of specific questions that directly relate to the policy that particular individual currently has in their filing cabinet. You know….the policy that they are relying on to protect them from having to file bankruptcy due to medical debt. The one they bought to cover that $400,000 life-saving organ transplant that they may need someday or those 40 chemotherapy treatments that they may have to undergo on an outpatient basis should they develop lung cancer.

    So what happens almost 100% of the time when I ask these individuals “BASIC” questions about their health insurance policy? They have difficulty answer them! The following are 10 questions that I frequently ask a prospective health insurance client. Let’s see how many YOU can answer without looking at your policy.

    1. What Insurance Company are you with and what is the name of your plan?
    2. What is your deductible?
    3. Do you know what your coinsurance percentage is and what dollar amount (stop loss) it is based on? (e.g. 80/20 coverage means you pay 20% of some dollar amount, what is it?)
    4. What is your maximum out of pocket expense per year? (e.g. deductibles + coinsurance + other fees)
    5. What is the Lifetime maximum benefit the insurance company will pay out if you become seriously ill and does your plan have any “per illness” maximums or caps? (e.g. the plan has a $5 million lifetime maximum, but only pays out $1 million per illness. This means that you would have to develop FIVE separate and unrelated life-threatening illnesses costing $1 million or less to qualify for $5 million of lifetime coverage)
    6. Is your plan a schedule plan, in that it only pays a certain amount for a specific list of procedures? (e.g., Mega Life & Health & Midwest National Life, a.k.a. National Association of the Self-Employed NASE)
    7. Does your plan have doctor copays and are you limited to a certain number of doctor copay visits per year? (e.g. Can only go to the doctor 2 times a year for a $20 copay?)
    9. Does your plan offer outpatient prescription drug coverage and if it does, do you pay a copay for your prescriptions or do you have to meet a separate drug deductible before you receive any benefits?
    10. Does your plan have any reduction in benefits for organ transplants and if so, what is maximum the plan will pay if you need an organ transplant? (e.g. Some plans only pay a $100,000 maximum benefit for organ transplants, but the procedure actually costs $250-$400K)
    9. Do you have to pay a separate deductible for each hospital admission or for each emergency room visit? (e.g. Some plans have a separate $750 hospital admission fee for each hospital admission which is separate from your deductible. Others have a separate $100 E.R. deductible that may be waived if you are admitted to the hospital.)
    10. Are there any restrictions, benefit “caps” or “access fees” on out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc.? (e.g. Some plans pay a $500 maximum for each out-patient treatment and others require you to pay a $250 “access fee” per treatment. This is usually separate from your plan deductible. So for 40 chemotherapy treatments, you would have to pay 40 x $250 = $10,000)

    So how many questions could you answer? If you couldn’t answer all ten questions either, that doesn’t necessarily mean that you are not a smart consumer? It may just mean that you just dealt with a “bad” agent, because a “great” agent would have really taken the time to help you understand your insurance benefits. A “great” agent asks questions to try to understand your insurance needs and recommends plans based those needs. A “great” agent takes the time to explain the difference to you regarding “needs” and “wants” and gives you enough information to weigh all of your options so you can make an informed purchasing decision. A “great” agent looks out for YOUR best interest and NOT the interest of the insurance company.

    So how do you know if you have a “great” agent? If you can answer all of the above questions without looking at your health insurance policy, you have a “great” agent. If you can answer the majority, you may have a “good” agent. If you can only answer a few, you, most likely, have a “bad” agent. Just like any other profession, there are insurance agents that really care about the clients they work with, and there are others that avoid your questions and duck your calls when you leave messages about your unpaid claims or your skyrocketing health insurance rates.

    Remember, purchasing health insurance is just as important as purchasing a house or a car, if not more important. Ask your agent a lot of questions and make sure that the answers that s/he provides are thoroughly explained to you. If you don’t feel comfortable with the coverage, price, etc. ask your agent if you can see another plan so you can make a side by side comparison before you buy. Additionally, read the “fine print” in your health plan brochure and policy and ask your agent what every asterisk (*) next to the benefit description really means.

    Furthermore, do your own due diligence. For example, if you research MEGA Life and Health, a.k.a. Midwest National Life a.k.a. National Association for the Self Employed (N.A.S.E), you will find that there have been 14 class action lawsuits brought against them since 1995. So ask yourself, “Is this a company I would trust to pay my insurance claims?

    Furthermore, ask your agent if s/he is a “captive” agent or an insurance “broker.”
    “Captive” agents can only offer ONE insurance company’s products.” Independent” agents or insurance “brokers” can offer you a variety of different insurance plans from many different companies. These plans can often be customize to meet your specific insurance needs and budget.

    Health insurance is probably one of the only things that I would not recommend buying off of the internet. In my opinion, there are too many variables to consider. A health insurance purchase requires the level of personal attention that only an insurance professional can provide. So use Ebay and Amazon for your less important purchases and use a knowledgeable, ethical and reputable insurance agent or broker for the most important purchase you will ever make….your health insurance policy.

    Lastly, if you have concerns about an insurance company or agent, contact your state’s Department of Insurance BEFORE you buy your policy. Your state’s Department of Insurance can tell you if there have been any complaints filed by policy holders against that insurance company and the reason for the complaints. If you suspect that your agent is trying to sell you a fraudulent insurance policy, (e.g. you have to join an association to qualify for health insurance, you have to become a member of a union, you have to become part of a group or a professional association) you should contact your state’s Department of Insurance to check to see if you agent is licensed and to verify that the insurance policy and insurance company are registered in your state.

    In closing, I hope I have given you enough information so you can become an INFORMED consumer. However, I remain convinced that the following words of wisdom still go along way:

    1. “If it sounds too good to be true, it probably is!”
    2. “If you only buy on price, you get what you pay for.”

    C. Steven Tucker
    Licensed Insurance Agent
    Small Business Insurance Services, Inc.
    “The Best Policy Is A Great Agent”