Health care|May 14, 2012 8:00 AM

More health insurance doesn’t pay what consumers need

Experts’ advice: Read the fine print, save for surgeries

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More consumers are falling into health insurance policies that won’t cover their bills when they get sick.

That’s according to Wendell Potter, a nationally known author and former insurance PR executive-turned-industry critic who has visited Colorado twice in recent weeks, speaking in Colorado Springs and Pueblo.

“People look at the cost of premiums, and don’t realize that’s not nearly the entire amount that they are going to be paying for coverage,” Potter said in an interview with Colorado Public News before one of his speeches. Consumers, he said, also need to consider:

Wendell Potter, a nationally known author and former insurance executive-turned-industry critic, has visited Colorado twice in recent weeks.

  • High deductibles
  • Procedures and other items not covered
  • Payments beyond the so-called “out-of-pocket maximum”
  • Surprise out-of-network expenses at in-network hospitals

Potter is not alone. Insurance companies are also issuing similar warnings – though less dire – telling the public not to assume their policies will cover everything. Many advise consumers to be certain they understand what’s covered, what’s not, and to set aside money to pay the medical bills that today’s policies will leave to them.

Then, “when you do need coverage, you have sufficient savings,” said Will Shanley, spokesman for United Healthcare.

Customers should calculate their share of costs of a major surgery or injury, and ask themselves: “Would I be able to afford that?” said Jeff Sepich, large group sales director for Anthem Blue Cross in Colorado.

A recent Colorado Health Access Survey found that 671,000 Coloradans are underinsured – that is, they have insurance but know it doesn’t cover enough. As policies become more obscure, more people are ending up underinsured – and increasingly don’t know it.

Potter was brought to Colorado Springs by Republican and former Colorado insurance commissioner Marcy Morrison, where he spoke to a group of about 200 in late April. He appeared in Pueblo on Tuesday, May 8, drawing a crowd of about 175.

The problem, he says, starts with deductibles – the amount people must pay before the insurance company does.

“More and more employers and insurers are moving people into high-deductible plans,” he said. “People are now finding themselves in family policies that have $50,000 deductibles every year.”

“My worry is that even if the Affordable Care Act is fully implemented, and more people are in coverage, a lot of people will be opting to enroll in plans with high deductibles – and they shouldn’t,” he continued. “They’re still going to be vulnerable to losing their homes and having to file for bankruptcy if they get seriously ill.”

Another issue: Many policies have good coverage for doctors inside the network of preferred providers – but require customers to pay as much as 50 percent for services outside the network. Consumers may think they will never use an out-of-network provider, so they don’t have to worry about this. But it’s actually possible to have surgery at an in-network hospital, and be billed by out-of-network doctors who work there.

“Who would ever stop to think – particularly if you are ill – if the physicians who are going to treat you in a hospital are included in your network? It’s an insane situation,” Potter said.

Shanley agreed that consumers need to be aware of this possibility. He advised asking detailed questions of hospitals and doctors about whether all their bills will be in-network.

Many insurers have websites where it is easy to determine whether the surgeon and hospital are in-network. But it’s nearly impossible to pre-check certain hospital staff doctors, like anesthesiologists, pathologists and radiologists, Sepich said. Colorado law does require such services to be billed at in-network rates. “It’s a nice consumer protection,” he said.

Consumers also need to ask whether out-of-network fees are included in the out-of-pocket maximum, Sepich said. On some policies, that maximum isn’t a maximum, because some bills just aren’t counted.

In addition, patients can get a bill for a service not covered by the policy.

Potter also warned consumers to read carefully, especially on “plans of limited benefits” or “consumer-directed” plans.

“That’s another thing that has become increasingly popular and is marketed heavily by insurance companies – plans with benefits that are so limited, they often don’t cover, in many cases, hospitalizations!” Potter said.

Purchasers also “need to make sure there are no annual or lifetime limits,” he said. “The average hospital stay in this country is now more than $20,000. And some of these plans have annual limits that are less than that.”

“You can really find yourself on the hook for a lot of money,” he said.

Customers also need to be prepared to pay a 10 or 20 percent share on many policies.

“Ten percent of a major medical procedure can still be a significant amount,” Sepich warned. On a $100,000 list of charges, that’s $10,000 from the patient.

Potter has been speaking in Colorado in favor of the federal health care law now under review by the Supreme Court. He sees it as containing major consumer protections and extending care to more people. But, he says, the law has many flaws, as special interests had too much influence on it.

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