Health Insurance Center

Health Insurance Q & As

Question 5 of 6 in Collecting Claims, Dispute Resolution And Denials
Ways health insurance companies can mess with your claim for benefits
Once you have purchased a health insurance policy, in many cases the work has just begun. You purchased the policy to provide you with benefits for medical care and treatment. Most insurance companies wish to provide you with benefits due under the policy – not more than what are due, just what are due. However, sometimes because of corporate pressure, the claims adjuster may pay less than is actually due according to the provisions of the policy you purchased. As the claimant, you are entitled to those benefits, but it requires vigilance on your part to ensure you receive the benefits for which you are paying a very substantial premium.

Here are some of the ways an insurer can improperly affect your health insurance claims submissions:

  1. Misrepresenting a material fact or policy provision relating to coverage at issue. As a claimant, your test in this regard is common sense. Policy provisions can be difficult to understand for the average consumer. There are insurance policy plain language laws in every state. But that has not solved the problem. Insurance policy wording and concepts can still be difficult to understand. You must realize that insurance company claims workers, while generally just trying to apply the common meaning of policy provisions, will in some cases be influenced by a corporate desire to pay as few claims as possible or, at least, not pay more than they are absolutely required to pay. With that mindset, they may try to stretch the policy wording to deny, reduce or limit a claim that should be paid. This can also lead to a straightforward misrepresentation to you of a material fact or the meaning of a policy provision related to coverage. If it doesn’t make sense to you, challenge it. Some companies are more aggressive than others. Some will push the envelope and wait for you to fight back before they comply with the common sense, literal meaning of the policy wording.
  2. Failing to attempt, in good faith, to effectuate a prompt, fair, and equitable settlement for which liability is reasonably clear. Here, again, the insurance company claims rep may be motivated by a desire to keep claim payments as low as possible. Sometimes this takes the form of dragging the claim handling process out or proposing a claim payment that is less than is due under the policy. If you are unhappy with the delay or uncomfortable with the result, don’t accept it. Challenge it.
  3. Failing to settle part of a claim where liability is clear as leverage to influence you to settle another portion of the claim. The insurer already has the advantage over the you in two ways. First, the insurer drafts the policy wording with no opportunity for you, the claimant/insured, to negotiate the terms of this legal contract. Second, the terms, no matter how simple regulators may try to make them, are still very technical and complicated. Withholding payment on the payable part of a claim as leverage to settle another part of the claim may be grounds for action against the insurance company. Challenge it.
  4. Failing to promptly provide claimant a reasonable explanation, based on policy provisions, for the claim decision. The claimant has a right to be provided with a prompt reasonable explanation for the claim decision. If the explanation is either not prompt or is not reasonable, you have every right to press for an immediate, clear and reasonable explanation.

REMEMBER:

When it comes to claims processing, the insurer has the edge over you in several ways:

  1. The insurer drafted the policy wording.
  2. The policy wording and certain insurance concepts can be difficult to understand for a layperson.
  3. The insurer has the money.

But you have one advantage when dealing with an insurer about the meaning and application of policy wording. Because you had no opportunity to negotiate with the insurer about the wording of the policy, the law will construe (interpret) any ambiguities (lack of clarity) in the wording against the insurer and in your favor. This is your advantage in negotiating with an insurer on a claim. If the policy wording is unclear (or, better yet, in your favor), a court of law will most likely rule in your favor.