Why I Support Prop 45: Health Insurance Hell on Three Fronts

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“Premiums for our company have gone up 37% since 2010, and our yearly health insurance dread just came in for 2015: HMO premiums up 7% and PPO up 9%. We can’t afford this. I don’t know what to do.”

Diana Guth, BA, RRT

Owner, Home Respiratory Care Sleep Solutions

As a Registered Respiratory Therapist and the owner of Home Respiratory Care (HRC), a home medical equipment supply company which specializes in the treatment of people who suffer from sleep disorders and respiratory insufficiency, I am deeply enmeshed in the healthcare insurance trenches on three fronts: as a healthcare provider, a small business employer, and as a consumer. 
My small business employs 14 hard-working and dedicated staff persons and since 2010 health insurance premiums for our company have gone up 37%. At the same time my employees have been hit with higher co-pays and reduced benefits that have also increased their costs. I am paying premiums that are $500 – $600 per employee per month. This does not include coverage for their families. I can’t afford that. Now we are being told that our rates for 2015 will be increased another 7% for our HMO option and 9% for the PPO. 
I am supporting Prop 45 because my experiences with health insurance companies for the almost 20 years I have been in business have convinced me that their only goal is to profit from the healthcare ills of Americans. They have little concern for our right to decent, affordable health care. Prop 45 will force them to open their books, justify their rates and give us the power to stop unfair rate increases.
As a Small Business Employer
As a healthcare provider and a former employee, I have always felt a deep responsibility to provide health insurance for my hard working, dedicated staff. As a small business that grew from two employees to 14 employees over the last 19+ years, I have experienced the pitfalls of buying health insurance and have painfully experienced the greedy evolution of health insurance policy offerings to small businesses.
Small business insurance policies are based on criteria that allow discrimination based on age, pre-existing conditions and residency:
  • Age Banding – The law correctly prohibits age discrimination by employers, but health insurance companies can legally discriminate by charging much more for older employees. 
  • A pre-existing condition for one employee means higher premiums for all employees. But employers can’t discriminate against people who are disabled. They are expected to make reasonable accommodations even if it costs them more money.
  • Residency Banding – Health insurers are allowed to base their premiums on where the employee lives.
Professional Employer Organization (PEO) Experiences
In an effort to lower the cost of health insurance I joined a Professional Employers Organization (PEO). They claimed that because they were part of a larger pool, the premiums were less and were not age banded. I have gone through three PEOs as I have tried to reduce my health insurance costs. 
Premiums through the first PEO were initially less than those of the small business plan I’d had via a broker, but the relief was only temporary. The insurance premiums kept rising by double digits each year and then the PEO went out of business.
My second effort to reduce costs through a PEO was with ADP Business Services. They told us that we were part of a large insurance pool and would therefore be charged less. But after being hit with a shocking 90% rate hike and major benefit reductions due to my claim for lung cancer treatment, we found out the hard way that we were treated as an individual small business, not as part of a large insurance pool. I The premiums were astronomical. We could not afford this. This was Aetna’s nasty way of getting rid of us.
My third effort to contain costs through a PEO involved a large amount of time shopping around for a PEO that really was part of a single large insurance pool. It was very complicated. There was no way to compare plans – apples to apples – because of the many variables. We have been with the same PEO for a few years now but our premiums continue to rise. Last year the PEO switched companies in their quest to offer “affordable” health insurance to their clients and their own employees. This “fix” was short lived. We just received news on the upcoming rates. After much wrangling with Anthem Blue Cross the premiums for the HMO rose 7% and for the PPO 9%. 
In the past my employees and I shared the rising costs. It’s huge. I am paying premiums that are $500 – $600 per employee per month. This does not include coverage for their families. I can’t afford that. I’m helpless. I honestly don’t know what to do.A couple of years ago they offered a plan with a “Limited Provider Network” now referred to as Exclusive Provider Organization (EPO). Which network hospitals were located in west Los Angeles where I am? NONE!
As a Consumer – Deciding which Health Insurance Plan to Choose is a Complicated Gamble!
In order to make the best financial decision, the consumer must predict their upcoming healthcare needs. Everyone has a Health Crystal Ball, right? President Bush told us that we should be able to shop around to get the best health insurance deal. But with the many variables of coverage, in & out-of-network deductibles, co-pays, non-formulary prescription costs, not to mention completely unpredictable medical needs, this is a next-to-impossible task! Because of my history, we assumed that we would meet the huge out-of-pocket limit. So we switched from a high deductible plan to the PPO option because it appeared to be the best (of the worst) deal. As a consumer with a serious “pre-existing condition”, a relative healthy husband and a dependent adult son with health problems who has an expensive, ever rising Individual PPO, our annual out-of-pocket medical expenses in 2012 were $16,000. 
Claim Mismanagement
Long Waits: I recently phoned Anthem Blue Cross to speak about a denied claim and I was put on hold for 45 minutes. They have inadequate number of representatives to handle all the calls that come in. This tactic saves them money on personnel and saves money by decreasing the chance of customer claims being paid. Full time working persons do not have the “luxury” of this being able to endure this rude invasion of their time.
Complicated, Unpredictable Claims Rules: For example, emergency visits that don’t result in an admission to the hospital are penalized with a large deductible.
No consumer control over Out-of-Network Healthcare Provider while hospitalized in an In-Network Hospital: A few days after being discharged for my lung cancer surgery I was admitted to an In-Network Hospital because of complications. A cardiologist saw me while I was in the hospital. I later received  a bill from him and discovered he was Out-of-Network. I had no choice and it cost me several hundred dollars.
As a Healthcare Provider
This is the only industry that I can think of that profits from inadequate staffing and undertraining personnel. Incompetence and understaffing results in delays and denials of claims, which cuts their costs.
The health insurance industry is abusing doctors and other healthcare providers in every way they can. For example:
Interfering With Medical Decisions: They are practicing medicine by overriding the medical orders of physicians by denying coverage of legitimate tests, services, surgeries and courses of medical treatment. 
Make it Difficult for Physicians to Order Treatment: The prescribing MD must take an inordinate amount of time medically justifying, in writing, in a particular way dictated by the insurance company, the reason the patient needs a particulate treatment
Healthcare Fee Schedules are Grossly Inadequate: They do not cover costs let alone allow for a reasonable profit. The “fee schedules” are not based on the healthcare provider’s costs. They are completely arbitrary. The costly administrative burdens that the HHI have created (the massive paperwork and overhead) are not considered.
Claim Delay Tactics & Payment Interference: They do not hire enough Claims Processors and don’t train them adequately.
“Losing Claims”: Their rate of “lost mail” far exceeds typical mail loss rates. To avoid “lost claims,” our Assistant Biller has resorted to Faxing documents with proof they were received then phoning to verify they were received.
  • Refusing to pay claims for sleep medical devices until they receive reports downloaded from more costly devices by licensed professional Respiratory Therapists but not covering the cost of generating these reports. They repeatedly request the reports after they have been sent (again, “lost”), forcing us to duplicate efforts.
  • Blue Shield sends the payments for the claims to the patient (instead of the provider if they are out-of-network). The patient then sometimes refuses to send money due to the provider. This creates collection costs. We have patients who have profited from us. They “steal” the expensive devices that we have supplied them they make money on top of that by not forwarding us the money that they received from Blue Shield.
Treatment Delay Tactics: Requiring “Prior Authorization,” then delaying approvals, which even when given doesn’t assure coverage
Running Up Administrative Overhead
  • Putting staff on hold for long periods of time ties up the phone line, creates a need for additional phone lines, and wastes employee time
  • Taking time to investigate the coverage before rendering services
  • Employees must spend time explaining the coverage (and non-coverage) to the patients
Running Up Costs
  • Only authorizing less expensive Home Sleep Studies which then requires the use of more expensive Auto CPAP machines but not paying more for the Auto CPAP devices
  • Requiring the Reports from more expensive sleep devices to prove usage but not paying for CPAP devices with those capabilities nor paying for the time it takes a Respiratory Therapist to generate the Reports (also mentioned above to delay or deny claims)
Not Paying for Respiratory Care Services
California requires licensed Respiratory Therapists to set-up, fit masks. Respiratory Care (RC) Services are inextricably associated with respiratory medical devices that include sleep medical devices and ventilators but the RC Services are not paid for. 
Slow Pay Tactics
Renting a replacement CPAP (sleep device) over 10-13 months until the purchase price has been met for a patient who has been a compliant user for years. This especially hurts the PPO consumer who needs it towards the end of the year because the Deductible will kick in shortly at the beginning of the year. This wouldn’t happen if the insurance purchased the device in full.
I’m voting Yes on Prop 45 because the health insurance companies are completely out of control. They are gouging every way they choose to keep their profits up. It’s not fair. Small businesses and individuals should not be put into the financially helpless position we are now in. Vote YES on Proposition 45!

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