One-Minute Book Reviews

September 28, 2009

Excuses Used by Aetna, Prudential and Blue Shield to Deny Health-Insurance Claims — From T. R. Reid’s ‘The Healing of America’

I was going to read The Lost Symbol over the weekend but picked up T. R. Reid’s elegant indictment of health care in the U.S., The Healing of America (Penguin, 277 pp., $25.95). And I was hooked after the first sentence: “If Nikki White had been a resident of any other rich country, she would be alive today.”

Reid had his bad shoulder examined by doctors in other well-off democracies that included France, Germany, Great Britain, Japan and Canada. And he uses the results as a springboard for exposing flaws in arguments made by insurers and others against adopting practices that work overseas: “It’s all socialized medicine over there,” “They ration care with waiting lists and limited choice,” “Those systems are too foreign to work in the United States,” and more.

Until I can review The Healing of America, here’s a brief excerpt from the book about the excuses used by major insurers to reject claims:

“In other developed countries, insurers are required to pay every claim. But U.S. insurance companies deny about 30 percent of all claims, although some of these are eventually paid through an appeal process. The reasons cited for denying valid claims can be ingenious. When our family lived in Japan, the friendly adjusters at Prudential used to deny our claims for medical or dental care on the grounds that the bills we submitted were denominated in yen. Somebody at Prudential had determined that the Japanese yen was a foreign currency; that violated the rules. My company later switched our health insurance to Aetna, which employed a similar dodge: The adjuster said she couldn’t pay our claims because she couldn’t call the doctor’s office to verify the bills. It seems that Aetna had a phone system for its adjusters that didn’t allow international calls, so our claims had to be denied.

“The most maddening of all the profit-maximizing mechanisms in the U.S. health insurance industry is the practice known as ‘rescission,’ a legal term that means ‘We’re canceling your coverage.’ This occurs when an injured person who has been paying premiums for months or years has a serious accident or contracts a serious disease, which can mean serious bills for the insurance company to pay. At that point, the insurer’s Rescission Department digs through all the records, looking for a reason to cancel the sick person’s coverage. For example, Steven Hailey, a machinist in Cypress, California, paid his health insurance premium every month. Then he was hit by a truck. He was still being treated for his injuries when Blue Shield of California wrote to tell him that his coverage had been canceled because his weight was too high. He would have to pay the hospital bills himself – about $450,000 worth of bills.”

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