Insurance and insurance companies in the United States today are a major topic of conversation. In healthcare, for example, you literally cannot escape the debate on whether the Affordable Care Act (Obamacare) should remain as is, be fixed, or be repealed and replaced. Millions of Americans could lose their coverage or simply won’t be able to afford it unless something is done about our healthcare system. That whole topic of insurance problems is very, very painful. But that isn’t exactly what this post is about.
Today’s post is about how your insurance policies and the coverages you pay for are managed that can be even more painful than any illness, injury, or accident. That goes for health, auto, homeowners, and even your life insurance. Here’s why.
Unfortunately, I have had cause to use my health insurance all too frequently over the past 10 years. I have been insured ever since I was a child by many different companies and being in fairly good health most of the first 50+ years of my life, I never really worried too much about or gave a lot of thought to my health insurance.
That’s the rub though. Insurance is a must have and when you aren’t using it in any big way, the insurance companies are your very best friends. They in fact love you and your brother, your mother and your little pet doggie named Sunshine. As long as you pay your monthly premiums on time, the world is a really wonderful place for them and thus for you. And then…something happens.
Health Insurance Companies Can Sometimes Make You Sick
When you’re down and possibly out due to serious injury or illness, of course you are mighty thankful for having insurance coverage. You never know if or when you will need it. Getting sick or injured is not any fun and losing time from work, family, and life is probably the worst thing that can ever happen to you. But that doesn’t mean you won’t have insurance problems.
When I had my heart attack in 2012, I can testify that in addition to the physical, mental, and monetary stress on me personally, my family suffered as much or more with the thought that I might have died if not for the care I was able to get because I had the insurance coverage for everything including the aftercare.
But let’s be clear. Insurance companies are not your friends there just to help. They are a business and that business is to make money, lots of money.
The Insurance Business Model is a Different Animal
Insurance company business models are not the same as other businesses like retail, manufacturing, and food services where service to the consumer is their goal and it’s in their best interest to foster repeat business. You dine at a good restaurant even when it’s expensive if you get quality food and service and feel like they are treating you special and care about your experience, don’t you? And you return when you want that experience again, right? Not quite the same when it comes to insurance.
For one, insurance companies charge hefty premiums with the promises of coverages that are limited in financial scope and specific situations in the event of an accident or illness (which may or may not ever happen). They are banking on the fact that they will collect way more in premiums from their customers than they will ever have to pay out in claims.
Insurance companies can deny or delay those payouts to you and your doctors and hospitals. That can buy them time and time earns them interest on their money which of course puts money in their pockets. We aren’t talking small change here as insurance companies collected over $2.1 trillion dollars in 2015 in premiums!
Every delay means more money for them. Even at 2% interest a year that means billions of dollars to them.
The Insurance Warning Label
You are probably all too familiar with things like “that’s not covered under your policy” being spouted by an insurance company when you have had to file a claim or seek some kind of coverage to be taken care of.
Health insurance is a requirement (and I mean that literally under The Affordable Care Act while it still exists), but in the larger sense it’s really not a wise decision to go without it because it is really a very risky gamble to do so. That’s why most sensible people who can afford to have it, do. Without insurance you may still get care and you may physically recover in time, but if you need long term care you may not be able to get it because of your financial situation and you can even go bankrupt or die.
And It’s Not Just Health Insurance
All states require some sort of auto insurance. Auto insurance companies operate on the same business model as health insurance companies, but with one extra catch: you often have to deal with the “friendly auto insurance adjuster”.
Insurance adjusters may approach you as if they are your friends and on your side if you are involved in any accident, but trust me on this one – they’re not! When it comes to paying any claims, they are your well-trained adversaries whose sole job is to pay out as little as possible to protect their employer’s bottom line and that puts you on opposite side of the bargaining table. They may sound friendly, but the training they get is the reason that these companies make the money that they do and they have the advantage over you whether you know it or not. Don’t underestimate them.
Here’s a good tip for you if and when you are ever in a car accident although I do hope you will never need it. Don’t “chit chat” with your insurance adjuster. He can and will use any and all information against you when it comes to paying your claim or medical bills even when it seems like a friendly conversation. If in that conversation you mention that you work very hard at your job and are required to do heavy lifting for example, he may try and establish that your back injury in a car accident was partially due to your job and reduce the payout accordingly. It does sometimes happen that way. Be civil, but do not assume that apparent sympathy and concern from him or her for you is real. You have no obligation to make small talk with an insurance adjuster.
The Bills That Keep on Giving
One of the most aggravating and “sickening” feelings you can ever have is receiving a statement from a doctor or hospital from an illness or injury that they say was never paid by your insurance company as you thought. This is so much more frustrating when you get that statement months or even years after the incident. That has happened to me and I am betting to you as well.
To begin with, I can swear that those bills were paid and I have the proof of that somewhere around here. If I take a few hours and look through the 300 pages of bills, statements, and correspondence, I think I can find it, I hope. Keeping your documents organized is a big help in the process.
Then there’s the phone calls you have to make to try to clear up this problem, which by the way usually requires you to pay this amount yourself immediately upon receipt even when two years have gone by without a word about these “unpaid” matters. Be prepared to be placed on hold for a while and that’s a really good time to take a nap when doing so even if “your call is very important to them”! Hopefully you won’t get cut off or transferred 3 or 4 times before reaching someone that can help you!
The Bottom Line
Really, the insurance companies and the doctors and hospitals that are involved are hoping that you will become frustrated and tired of the matter and just resign yourself to paying the bill on your own. It’s not always that the claim should be paid by you, but trying to fix errors or miscommunications months and years after the fact is extremely painful if not impossible. Tip here: file all of your correspondence with your insurance company by date and incident and keep all of them where you can find them. Those bills might just never end.
If this sounds like me whining about how vulnerable we are when it comes to insurance coverages and the benefit and cost of them, it is. It’s like the old saying, “you can’t live with them and you can’t live without them!”
Have you experienced any insurance horror stories in your life? What have you done when faced with a problem in getting the coverage you paid for taken care of properly? Are health, auto, homeowners, and life insurance a problem or worth the pain it sometimes gives you for the peace of mind it promises to provide?