Hard To Believe But Insurance Company Policies Hurt Patients

I get it.  Insurance companies are in business to make money.  I don’t begrudge them a reasonable profit.  However, as evidenced by their behavior over the years, they can’t seem to operate without taking advantage of patients and patients are being hurt by their practices.

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Health insurance is a necessity for most Americans, but it should not be.  As I have pointed out often in the past, we are the only major industrial country without universal health insurance.  This results in a number of bad things happening to Americans that just should not happen.  As just a single example, expectant mothers do not get the prenatal care they and their unborn babies need.  The consequences of this are some of the highest maternal death rates in the world.   Our rate in 2021 was 32.9 maternal deaths for every 100,000 live births.  That is by far the highest maternal death rate among the industrialized nations.  It was four times that of the next highest country.  Give us universal health care and we solve a lot of problems.  That said, don’t hold your breath.  The health insurers have a lot of money and they are not afraid to spend it on lobbying Congress to keep things the way they are.

Health insurance practices which disadvantage patients begin with the underwriting process.  Underwriting is the part of the insurance business that decides what the rates need to be for a particular geographical area in order for the insurance company to be able to make money.  Set the rates too low and the company loses money.  Set them too high and the company may lose business to other companies whose coverage is more reasonably priced.  Unfortunately, competition is not always effective because there just are not enough companies willing to write policies.  What the economists call “barriers to entry” keep a lot of would-be competitors out of the marketplace.

Underwriters often use credit scores as a quick way of determining risk.  The lower the credit scores, the higher the risk is perceived to be and the higher premiums need to be to account for that risk.  It should come as no shock that poorer neighborhoods and poorer people have lower credit scores and are therefore asked to pay higher premiums.

For a lot of reasons related to their economic situation, poorer people are less healthy than people who are further up the socioeconomic ladder.  It is sometimes hard to get fresh food in poorer neighborhoods so people rely on processed foods or fast foods.  These are much less healthier.  People in unfavorable economic situations have higher rates of obesity, with all of the health problems that accompany obesity, such as Type 2 diabetes, high blood pressure, and coronary artery disease.  People with poorer health get charged higher premiums for coverage and, as a result, have still poorer health outcomes because they can’t afford to see a doctor.

Your problems are not over when you get health insurance.  One of the biggest areas of debate today in health insurance is the practice of many insurance companies to require patients to obtain insurance company pre-authorization before they get to see a specialist or before they can have many different kinds of treatment.  And, of course, heaven help you if you need an expensive medication.

Pre-authorization does its job of saving money for the insurance companies by discouraging patients from getting the care they need – care they have paid the insurance company to cover.  Fully half of the doctors surveyed recently by the American Medical Association endorsed the idea that pre-authorization requirements were keeping their patients from getting needed medical care.  Pre-authorization results in delayed, denied and abandoned health care claims.  Although not for the patients, this is just what the doctor ordered for companies looking to save a buck.

Thirty percent of the physicians responding to the AMA survey reported that problems with pre-authorization had resulted in serious health consequences for their patients, including unnecessary hospitalization, disability and even death.  That doctors must spend so much time and effort on obtaining pre-authorization results in higher priced health care for everyone else.  Someone has to pay for the staff needed to jump through the insurance company’s pre-authorization hoops.  The AMA believes that pre-authorization requirements are burdensome, inefficient and result in patients not receiving necessary care in a timely manner.

Older Americans are perhaps affected more by this than younger persons.  You know all those extra benefits promised you, if you sign up for a Medicare Advantage plan?  They get paid for by requiring pre-authorization.  If you are a traditional Medicare beneficiary, you do not have to get pre-authorization.  Medicare Advantage requires you to submit to the plan insurance company and its rules.  All those ads on TV cost money and the Medicare Advantage insurance companies have a lot of it because of policies like pre-authorization.

Thankfully, things may be beginning to change on this front.  Some health insurers, under intense pressure from the American Medical Association, Congress, and some state legislatures are beginning to roll back some of their pre-authorization requirements.  There is a long way to go, however.

Dealing with insurance company schemes is a lot like the old game of whack-a-mole.  You stop one unfair practice and they come up with two more to take its place.  Until we get universal health care, we just need to keep on whacking.

Posted in Birth Injuries, Doctors, Fee for Service, General Health, Health Care Costs, Health Insurers, healthy living, Insurance Law, Medical Costs, Medicare, Obesity, Type 2 Diabetes |