Wednesday, August 26, 2009

Health Care Stories: Chicago, IL

Sheila shares her woes in dealing with COBRA and her former employer.

I was laid off in 2006 and took COBRA. The rate was reasonable, and I sent my COBRA premium checks to the former employer. For the first 3-4 months, everything was fine.

After that, the EOBs (Explanation Of Benefits) showed that the insurance company applied the negotiated rate and that I owed the remainder. In other words, nothing was paid by the insurance company.

Calls to the insurance company stated only that the policy was in force. Calls and voice mails to the former employer (with their history of paying the health insurance premiums late on more than one occasion while I worked there) never generated a response.

For six months, my former employer cashed my COBRA premium checks (and those of other former colleagues) without paying the insurance company. It was a classic Catch-22: the insurance company claimed the policy was still in force, so I had to pay COBRA premiums to avoid the "pre-existing conditions" penalty with a future employer, but they couldn't pay claims, as they weren't being paid.

$2,000 later, the insurance company retroactively canceled my former employer's policy for non-payment of premiums. I'm not sure of the legal terminology, but I call it theft.

Like others, I am not insurable outside of the state high-risk pool plan (CHIP). The underwriters were fair, as they approved my application upon my sending copies of the canceled COBRA checks.

Although the plan is nominally similar to the previous employer's plan, the coverage is somewhat more restrictive, costs three times as much as the COBRA premium, and has a higher deductible.

This state has a near-monopoly when it comes to health insurance, as 80% or more of those insured (including employees of self-insured companies for which this company acts as third-party administrator, and Medicaid supplement policy holders) are covered by a single, for-profit health insurance company.

As a country, we suffer most from the excesses and underhanded tactics of the health insurance industry. Foreign health insurance companies must accept all applicants, and they can't cancel as long as you pay your premiums. The key difference is that foreign health insurance plans exist only to pay people's medical bills, not to make a profit.

Chicago, IL


T.R. Reed has an excellent article in the Washington Post, 5 Myths About Health Care Around The World - - some of which I've excerpted above.

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1 comment:

Shani said...

Our problem with COBRA was that their first approach to any claim, no matter how small, was to deny it. I assume they did this hoping that some people wouldn't pursue the matter further. That was not the case with us, though of course I had to spend time yammering at them that I would have preferred to spend on other, more pleasant and productive activities.