Insurance Companies

One of the unexpected joys of having cancer is you get to deal with your health insurance company on a monthly basis. That's assuming you have insurance. God help you if you don't.

The first thing you need to understand is that each insurance company is different. They handle claims and/or approvals differently. Sometimes they act differently depending on what type of insurance plan you belong to.

The general rule is the more you pay per month for insurance coverage, the better you're going to be when a major catastrophe like cancer strikes. I have employer-sponsored health care and I still pay over $400/month for coverage of my wife and I. That's almost $5,000 per year in premiums and man am I glad I have it. My stem cell transplant, for instance, cost my insurance company over $125,000! That's about the last thing that I want to be making payments on for the rest of my life.

Another general rule with insurance companies is that they are not in the business of paying claims. They are in the business of collecting premiums. THEY NEVER WANT TO PAY YOUR CLAIM! They will do whatever is legally in their power not to, and sometime even what isn't legal.

Take for instance the act of "balance billing." When your insurance company negotiates with your doctor or hospital on reimbursement rates, both sides agree to a charge for each and every procedure/test that is "customary and reasonable." In order to maximize profits, doctors and hospitals often (read: always) bill the insurance companies more than negotiated rates. The insurance company then issues a statement that shows what was charged, how much is actually allowed, and how much they paid. Let's say you have a CT Scan. Let's further say the "allowed amount" was pre-negotiated to be $1500. Here's where the rub comes in. The hospital may bill your insurance company for $2500 for a CT Scan. The insurance company does what they do and pays the hospital $1500 for the test. The hospital then comes to you and demands the remaining $1000. Stop right there! This is where they often cross the legal line. If your deductibles are met and your copays are accounted for, this "balance billing" is often illegal and YOU DON'T HAVE TO PAY IT!! I actually had a friend who had breast cancer and was faced with a $25,000 bill from the hospital bill that turned out to be completely "balance billing." I let her know about the law and the hospital dropped their demands for the $25,000. It's got a bit of a slimy look to it and it doesn't smell too good either if you ask me. For more information, checkout a story that ran in Business Week about this topic:

And one last note…if your insurance company denies a claim you think you legal right to be reimbursed for, do not give up. Insurance companies often deny claims they know they're supposed to legally pay. They just want to see if you'll go away and pay it yourself when the hospital comes after you. Stick to your guns and get nasty if you have to. Some insurance companies have a secret rule that says, "Deny every claim three times." That's because they know the majority of people, when faced with 3 denials, will simply give up and pay the bill themselves. Don't be one of those folks!

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