Horror Tales From Insurance Land

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I'm sure California Insurance Commissioner Dave Jones knew what he was in for when he called together a few dozen consumer-focused organizations to talk about their issues with insurance–health, auto, home, long term care and more.

The stories filled a day, and could have gone on for days more–of payment and care denied, policies that turn out not to be what was advertised.

Maybe most shocking: An insurance company ordering a family in the Bay Area to fly their autistic toddler to Los Angeles for daily treatment if they wanted to stay in-network.

Jones and all of his top staff were there, responsive and looking for ways to use these stories for enforcement against illegal practices and to encourage insurers to treat consumers better voluntarily.

The Insurance Department got an earful. Here's a sampling:

    •    Surprise, You're Canceled! A guy needs major surgery and calls his insurance company to get approval. I's granted and he's already in the hospital, already had some treatment, when the hospital office calls the insurer just to triple check. At that point, the insurer says the policy was canceled weeks ago for failure to pay a $7 a month increase on the policy–even though the patient was never notified of the increase. Result: hundreds of thousands of dollars of unpaid medical care, and the patient is uninsured.

This cancellation tactic may be insurers' substitute for rescinding a policy when a patient gets sick, citing some error on his or her insurance application. That tactic been strictly limited by the federal health reforms. So now a $7 dispute is enough to get a policy canceled for "nonpayment"–if the patient is going to cost the insurer some money. If you've ever heard of a healthy person being canceled over a $7 missed payment, let us know (click here).

    •    Find the Doctor In the Haystack: People seeking mental health care are, under the law, supposed to get the same level of treatment as for physical ailments. But the reality, told over and over at the meeting, is that insurers sometimes have zero in-network doctors for tough, expensive diagnoses like autism. It's against the law but hard to prove, since the insurer may hand the family a list of 100 psychologists, expecting them to call the list until they fnd–or don't find–one that treats children, and also treats what their child has.

    •    "Survivor" Getting any care, especially for tough diseases like autism, means endless delays, "lost" paperwork, repeated denials for the same discredited reason ("it's experimental." "It's education, not medical care.") The most persistent and knowledgeable eventually get treatment. But each refusal makes more families give up. It's "Survivor" with real lives at stake.

    •    Guess What's Covered? Homeowner insurance doesn't have the drama of health insurance. But when a family's biggest investment takes a hit from fire, water or other destruction, it's not small potatoes. Advocates at the meeting said insurers are steadily and stealthily cutting back on what's covered, especially water damage, and writing in other exceptions that thin out coverage. But homeowners can't compare policies because insurers won't show you the details until you buy.

Jones can't fix all these things quickly, and he's not the type to use a sledgehammer if he doesn't have to. But he's paying attention to the groups who can be his department's boots on the ground, and has made it clear that he won't hesitate to go after rulebreakers when he's got the proof.

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