Applying for Health Insurance Coverage? Get Ready For the Battle of Your Life!

Applying for Health Insurance Coverage? Get Ready For the Battle of Your Life!
Image: Pixabay
February 6, 2013

Health insurance costs are rising rapidly and many of us who do not have health insurance through our employers are forced to purchase outrageously priced plans from private insurance companies.

If you're converting from an employer-based plan to an individual plan, you may be in for a shock. Or perhaps you have prepared yourself already? You may be looking for an individual plan to offset the increased premium cost of an employer-based plan, which May have increased by double, triple, or even more.

Health insurance is a necessary evil. What would we do if we were injured or got sick? Many consumers are being forced to consider cut rate insurance products to cover their very basic needs. Some companies offer extremely high deductible policies, such as those with a $10,000 deductible, in exchange for the promise of keeping premiums low.

Many consumers are surprised to find that those "low rates" are nearly as much as a regular rate. Even if you're healthy, a $10,000 deductible policy with 50% coinsurance, which is the percentage you pay after meeting your deductible, can run several hundred dollars or more per month. That's no deal!

If you are shopping around for your own insurance policy, take a little time first to do some homework. Have you been to the doctor recently? If you've seen the doctor anytime in the last five years, you may consider requesting your health records. Sometimes a minor inaccuracy can cause you a lot of trouble during the application process.

Take United Healthcare, for instance. A simple medical record error that shows both non-smoker and smoker on the same line can end up costing you a premium of 25% more than you should be paying. Even if all of your other medical records show non-smoker, the insurance company will err on the side of caution and assign you a high risk Tobacco class.

They will give you an opportunity to appeal the decision, but they don't tell you that in order to appeal the decision you need to sign a disclosure, complete another application, and pay a $60-$90 fee to cover urine samples and laboratory fees.

Consider another recent experience with Blue Cross Blue Shield of North Carolina. An applicant may be completely denied because of an application error. In one case, a consumer was denied because of an error resulting from a checkbox.

At the end of the application, the application was automatically denied by the computer system giving a reason of no less than 34 different diseases and syndromes. The result was that the consumer was forced to obtain a minimum of five years of medical records from all doctors in the completion of an appeals form.

In another Blue Cross example, an applicant was denied purely on the basis that the applicant had previously received a steroid injection. The company indicated that a steroid injection is an indication of a pending surgery. Obviously, a steroid injection does not necessarily mean that an applicant is going to have a surgery.

We've also noticed that some insurance companies, such as Blue Cross Blue Shield of North Carolina, are using your information when you call up to answer questions for use on later applications.

For example: if a consumer calls today to ask generic questions about conditions covered or about hypothetical situations, the agent on the end of the line is trained to put the consumer into the computer. While it may sound like the agent is just offering to give you a quick quote, the information being given can be used against you later on when the company is deciding whether or not to insure you or whether or not to charge you a high or low premium.

Consumers have been denied health insurance coverage for "pending operations" simply because they gave identifiable information to an agent when asking about how insurance works. The consumer used the example of a sudden heart attack in order to get a better understanding of deductibles and coinsurance. The agent on the other end of the phone entered heart problems into the computer under the person's name.

If a consumer calls today and inquires about whether a particular procedure will be covered, insurance companies will record that information into a centralized database from which they can determine your rates at a later time. All insurance companies pool information from this same centralized database.

Obviously, we do not agree with the practice of entering a consumer's information into a centralized database if the consumer is merely asking questions. Hypothetical situations are purely hypothetical. Many people do not understand insurance and in order to get a better understanding, many people would like to use a hypothetical scenario.

We suggest the following when looking into health insurance:

Always get a copy of the last five years of your medical records, if possible, to look for any inaccuracies that may raise red flags.

Your primary care provider is of particular interest to health insurance companies. If your current primary care provider has a lot of inaccurate information, you may consider selecting an alternative primary care provider before applying for insurance.

If you decide that you want to call an insurance company before applying for a rate quote, try blocking your phone number by dialing *67 or by using another telephone other than your own. The insurance company will have a harder time associating your information with your future application.

If you do not feel comfortable, tell the agent that you do not wish to give your information at the present time. If push comes to shove, consider calling yourself "John Smith" for the remainder of the call.

We do not believe that giving any personal identifying information, such as your name, birthdate, or telephone number is necessary when only asking basic or hypothetical questions about a company's insurance products.

If there is an error in a medical record, or you see something that might cause alarm, feel free to request that the healthcare provider insert a note on to your chart that disputes the information in question.

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