Health Insurance, American Style
by Mike Kimel
Following a merger, a few months ago I took a severance package from my most recent employer. Put another way, I became unemployed. I started looking for another job but without much luck. In the last few weeks, I’ve also started doing some consulting work with two clients. Its been sporadic but lucrative, and I’m trying to figure out how to ramp that up quickly. Having been a consultant before for eight years, I know the tough thing is always maintaining a strong enough stable of clients. (FYI, the work I’ve been doing has been economic analysis, business analytics, and litigation support. If you or anyone needs that sort of a skillset, drop me a line at “mike” period “kimel” at “gmail.com.”) Fortunately, in addition to the consulting, we have some other income coming in and a fair amount saved up, so I don’t need to get 100 mph immediately.
One of the drawbacks of being unemployed or an independent consultant involves health insurance. When I left my employer, I became eligible for COBRA. Here’s my ongoing COBRA story. I’m going to change all names to protect the guilty and innocent alike. Call my former employer A, the COBRA administrator they use B, and my insurance company C.
A few weeks after I took the severance, A informed B that I was no longer with the company and thus eligible for COBRA. I had been checking B’s website religiously because I’m kind of paranoid about lacking health insurance. So one day, I logged on and found that I was eligible. But there was a small problem – somewhere along the line, I had lost my dependents. So I called B, B called A, some other stuff happened in the background, a day or two went by, and when I logged in, lo and behold, my wife was now listed as a dependent. But there was a small problem – I also happen to have a (at the time) thirteen month old son. So I called B, B called A, some other stuff happened in the background, a day or two went by, and when I logged in, lo and behold, my son was now listed as a dependent. But there was a small problem – neither of my dependents was listed as having been on my insurance policies when I was employed, thus making them ineligible for COBRA coverage. So I called B, B called A, some other stuff happened in the background, and when I logged in, lo and behold, my wife was listed as having been on my health insurance. But there was a small problem – my son was not listed as having had health insurance, making him ineligible for COBRA. So I called B, B called A, some other stuff happened in the background, and when I logged in, lo and behold, both my dependents were listed as having been on my health insurance policy when I was employed. But there was a small problem – it seems that the records provided indicated that I had two spouses and no son. One of my two spouses, interestingly enough, had the same name, birthday and gender as my now non-existent son. The records, in other words, indicated that I personally was violating a nontrivial number of laws. So I called B, B called A, some other stuff happened in the background, and when I logged in, lo and behold, well, I couldn’t find the mistake in the records. So I signed up for COBRA, and I put us on direct payment from my bank account.
All’s well that ends well, no matter how much time is wasted. But I did mention that my insurance company, C, was going to be a part of the story, right? Today a letter comes in the mail. My wife had gone to a dermatologist. The dermatologist submitted the bill to C. C informed the dermatologist that we no longer had coverage.
So I called B. It was a lovely conversation. I was informed that, yes, they have been withdrawing money from my account, and yes, I am paid in full, but nevertheless, C’s records do show us having no coverage. I was told B is calling C. I was told that in 24 to 48 hours I need to call C to see if they listed us as having the insurance coverage for which I have been paying. At some later point my wife or I will also have to call the dermatologist. Call me cynical, but I expect this is going to take a lot of time and interfere with my ability to generate income.
As an aside, in the past few weeks we’ve started looking at new insurance options. Interestingly enough, it seems that if everyone in the family is generally healthy, COBRA is generally not the best option. If you’re also on the crossroads, you can learn how to get a tax deduction for life insurance.
I won’t go into details but this is similar to my experience with COBRA over the last year since leaving my previous job. The entire process seems to be designed to be as difficult as possible so that you’ll ditch COBRA for private insurance (or none at all, depending upon your circumstances.)
We need single-payer health care now. I’ll settle for a public option buy-in to Medicare for all adults, with people retaining the option to take employer coverage. Of course, this won’t work if a mandate is overturned by the courts. So we should really just go the extra step and tax people to pay for Medicare at cost or accept a subsidy of equal amount for private coverage. That way they’re not being forced to buy anything from a private company, but the private insurance market is still available if it can provide competitive coverage to Medicare.
It would be advisable to get a statement of coverage letter from your COBRA provider (if you don’t have one already) in the event that a bill for service by a provider is overlooked and billed after COBRA coverage lapses.
I received a bill from one of my daughter’s medical providers two years after the service was provided when she was covered by a COBRA insurance plan. The insurance provider (yep – the same one we paid our premium to) required us to prove that she was insured by their COBRA insurance policy at the time the service was provided.
Three cheers for Medicare For All.
It would be advisable to get a statement of coverage letter from your COBRA provider (if you don’t have one already) in the event that a bill for service by a provider is overlooked and billed after COBRA coverage lapses.
I received a bill from one of my daughter’s medical providers two years after the service was provided when she was covered by a COBRA insurance plan. The insurance provider (yep – the same one we paid our premium to) required us to prove that she was insured by their COBRA insurance policy at the time the service was provided.
Three cheers for Medicare For All.
It would be advisable to get a statement of coverage letter from your COBRA provider (if you don’t have one already) in the event that a bill for service by a provider is overlooked and billed after COBRA coverage lapses.
I received a bill from one of my daughter’s medical providers two years after the service was provided when she was covered by a COBRA insurance plan. The insurance provider (yep – the same one we paid our premium to) required us to prove that she was insured by their COBRA insurance policy at the time the service was provided.
Three cheers for Medicare For All.
Only hit the Post button once.
Only hit the Post button once.
What amuses me is that people think that the bureaucracy will get better when the government does it all.
Not generally the way it works folks.
When the “government does it all”, “A” and “C” would not exist (or “A” and “B” would not exist, however you look at it). Now, an argument might be made that “B” would then be a government bureaucrat, rather than a private insurance administrator, and therefore this would be “bad”. But not a rational argument.
Oh I don’t know. With a single payer system via We the People, the moment one is born in the US, they would be covered. Can’t get much easier than that.
Then again, why would be trust We the People to handle over a trillion dollars in “blow the world up” hardware and bureacracy, but think We the People can be responsible enough for health care fianancing? Of course, this excludes the current situtation of We the People being bought and sold by We the Corporations.
Yes, get that statement of coverage. And in general: don’t let there be one day when you and your family are not covered. Not because that could be the day you’re in some horrible car crash or something (well, yes, for that reason, too — I share your paranoia), but because later on, when you or your wife have an opportunity to sign up for group insurance via an employer, your insurer may still choose not to cover you on many fronts because you weren’t covered continuously (and I using that word strictly, in contrast to continually).
My daughter ran into this problem after she’d been COBRA’ed via my employers’ group plan for several years (it was like paying for college all over again). Fortunately, post facto, my employer was able to come up with said statement of coverage. That process wasted lots of people’s time and caused undue anxiety, but at least she had been covered every single day (and not the mere week or so they thought she hadn’t been covered).
I have something called a “certificate of prior coverage” which I guess is that. It then goes on to list a number of reasons we might need the certificate, most of them relating to getting insurance through a different provider. It almost seems like a joke – what difference should it make to getting coverage with another party whether I have coverage at present or not.
tim w,
As Batmensch points out, the problem here is that there are three parties involved when at best there should be one. What Batmensch doesn’t point out is that the fact that there are three parties involved means that in the best possible case, none of them have an incentive to solve the problem as each can point to at least one of the others as the party that should solve the problem.
However, that is the best case. The reality is worse. Reasoning this out purely from theory:
1. A no longer has an incentive to pass on any info at all as our relationship has been severed. Worse, you can make an argument that, up until whatever limits would cause me to sue, they have an incentive to break parts of the severance agreement they have with me as anything they might follow through on costs money. Similarly, their incentive is not to follow rules and regulations (again, only up until to the point where it becomes severe enough to cause me to sue).
2. B is merely a middle man paid by A. If A’s incentive is to do X, B’s incentive will not be to counter A’s attempt to do X. If A frequently tells B that a former employee’s children are actually their second, third, and fourth spouse, and B complains about it, what happens?
3. Up until the point where I am willing to sue, C has an incentive to take the premiums and not provide any service whatsoever. In fact, it seems self-evident that were it to do so in a large number of cases, in a sizable percentage of those cases the party defrauded would never find out, as they would run out of funding to pay for COBRA, get a different insurer or get a new job with new coverage before having to visit the doctor.
mch,
Doing my best to make sure the coverage is there.
And as you point out, this is a tremendous waste of time.
tim worstall: do you have elderly relatives that use Medicare?
I do. Never once have they ever had the kinds of time wasting phone calls and letter writing campaigns that are described here, and that I can personally attest to as well.
It seems to me that a bureaucrat with no financial incentive is a better bureaucrat than one who gets a bonus to deny coverage and care. Furthermore, the reams and reams and reams of paperwork due to different insurance companies and plans would be simplified into one. I once had a doctor who stopped taking insurance and made more money on a cash fee (with sliding scale) because he didn’t have the overhead of dealing with insurance companies. I have also had insurance companies hire “outside consultants” “to save me money” by evaluating my claims. How in the world is a middleman saving ME money?
The examples are endless.
Good points, Mike. And, they all have the same cause: $$. Take $$ out of the logic and it seems much safer. And, well, cheaper.
CPM,
Tim is from across the pond. Lookup NHS on his blog (http://timworstall.com/) and you’ll find he isn’t fond of the single payer system over there.
When Uncle Sam owned my body (and the uniform covering it) I went to sick call, got treated and went on my merry dutiful way. Only fear was the CO might be informed how dumb I was getting gasoline from my own car into my ear.
Then there was the time I walked into and said…………………..
None the worse for those experience!
No bills, what makes a citizen less important to uncle than a serviceperson?
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Actually, single payer I’m alright with. It’s the NHS model of single provider that I have real problems with.
One thing that made me laugh about your post was that you’re complaining about the paperwork to get the visit to the dermatologist paid for.
In the NHS it’s a 15 week wait to actually see the dermatologist after the referral by your GP.
ilsm,
Count yourself lucky. As per a discussion on another thread, getting gasoline in your ear puts you one short step away from marrying Pat Robertson: http://marriage.about.com/od/religious/p/patrobertson.htm
Cactus you need an insurance agent. These people really can be helpful. They could have helped you with your life insurance a few years ago and they could have told you that for a young family in good health COBRA is a rip-off. These are the most basic types of services that a good professional agent can provide. All the clerical bullshit you are going thru right now can be easily straigtened out by a good agent. (They probably would have never happened in the first place.) It’s not like you would be paying a higher premium if you used an agent. The rates are the rates.
Cobra, Medicare Advantage, Medicare part D are all set up to provide the private insurance industry the first cut for profits. The difficulties are build in on purpose.
That same principal worked for the industry in the Obama health care plan. It is what it is to insure the industries profits first of all. That was the price the nominal government had to pay the real government to get a few crumbs for the people. Anything more would have been socialism, and we can’t have that.
And no matter how healthy we are or think we are, there are the sudden and silent killers, like strokes, cardiac arrests and other such ugly things, making insurance a necessity.
Tim, would that be true in case of an emergency? I do know of waiting periods for specialist appointments here too.
Is it because they just won’t hire or there are no physicians to be hired? We have lots of physicians from India.
Lys,
And you think more physicians will be created when the government is involved? What will the incentive be?
little john,
We used to have one before the severance package. The one we used to have we dumped because he didn’t inform us of what you mentioned and swe discovered that fact (i.e., we can do better than COBRA) through other means.
We are still looking into the post COBRA option. We haven’t settled on anything yet. But we are now working with two insurance agents who seem to know what they’re doing.
But meanwhile, there is still the fact that had expenses that should have been covered. It cannot be that for reasonably healthy, reasonably financially sound, and reasonably well educated people have to be able to deal with specialists and judge whether they’re competent (like I said, we just dumped our old agent) in order to deal with something so fundamental. Most families aren’t lucky enough to be in our situation when a job loss happens.
“Cobra, Medicare Advantage, Medicare part D…”
I’ve heard others refer to Medicare Advantage as less than desirable coverage. As most at this site know by now I am no supporter of private industry as better than government. But my experience with my mother’s medical coverage through GHI PPO (a Medicare Advantage plan) has been without any problem. And she is the recipient of much care. She’s been in my household for seven years and has during that time under gone many procedures both routine and surgically complex. No problem with coverage. She pays a very minor co-pay and goes to virtually any physician we choose as GHI is widely accepted in the NYC area. And we only infrequently need a prior approval.
Yeah, it’s pretty confusing, I must admit. I hope you can find a good agent and let him/her deal with the weirdness of it all.
I personally think that medical educations should be government subsidized. And yes, doctor’s salaries will fall; but we’ll have enough of them. And in a single-payer system medical practice won’t be quite the insurance coordination nightmaer for doctors it is today.
tim worstall,
“One thing that made me laugh about your post was that you’re complaining about the paperwork to get the visit to the dermatologist paid for. “
You misunderstood. My wife had been going to this dermatologist for a while. The dermatologist was operating under the assumption that, as in the past, the health insuranc card she handed over was valid. Its a small item, and they didn’t feel it was necessary to check that the card was still valid before providing service. And in fact, a dermatologist probably would have accepted cash on the barrelhead instead. But had it been, say, a cardiologist and the issue was replacing one’s pacemaker, good luck getting it done without that insurance being there and getting confirmation 23 times from the insurance company that they would pay for it. No insurance? No service.
As to referrals… some years back, my wife was referred to a specialist by her doctor for something. The insurance company (i.e., namely bureaucrats) decided they wouldn’t pay for it. We could afford it, so we paid for it. But for most Americans, that means doing without. In other words, not just a 15 week wait, but a 15 week wait plus however many more weeks until you die. I realize that this determination happens in single payer systems too.
It would be interesting to see what percentage of needed procedures for the population as a whole do not occur because of single payer in Britain on the one hand versus (insurance company says no plus no insurance) in the US. I suspect that percentage is higher in the US, despite the fact that we spend a greater percentage of gdp on healthcare.
Right now the fact that we live shorter lives is chalked up to our lifestyle choices. Somehow I suspect that if someone were able to accurately gauge percentage of needed procedures that don’t occur, it would also get chalked up to lifestyle choices.
Jack,
I don’t doubt anything you say about Medicare advantage. My point is more the fact of the advantage and profits private insurance companies skim off at the expense of taxpayers. I can’t understand why people need to buy a supplemental insurance from a private insurer when it would have been better to just increase Medicare coverage without the private sector. We are being told the private insurers charge too much and the government pays.
what difference should it make to getting coverage with another party whether I have coverage at present or not
Mike, I believe this is because continuous group coverage (with no more than a 30 day, or maybe 60 day, interruption after losing the group coverage) is necessary in order to GET private insurance if there are pre-existing conditions – or at least necessary to get the waiting period waived – which, in essence means “to get coverage.”
I know this was an issue when my daughter was weighing her options. In addition to the anxiety surrounding being without coverage, there is the threat of being unable to obtain decent coverage if you let insurance lapse and don’t find another employer who has a plan.
Health insurance is a can of very nasty antagonistic worms… with teeth! MarkJ is right.
Single-payer for all! Private health insurers practice legalized extortion. They are not suited to be the solution.
Darren, to study medicine is very expensive and the AMA used to make sure the market would not be swamped with physicians. The free market does have an incentive to keep the numbers low. The government could subsidize like Batmensch pointed out. It would be a contribution to the free market of supply and demand, at the moment we do have more demand than supply.
Physicians like to live in populated areas like cities but a little out side you have problems to find a Dr.
Medicare
has the best policies so we can take this with out any secondary thought!!