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Life in the Trenches of the Health Insurance Business: Part 1 in a Series

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If you’ve been in the health insurance business for any period of time you know one thing is true — this is a crazy, frustrating, often Kafkaesque industry. Instead of crying about it, we say: You gotta laugh.

Following is the first entry of our book, “You Gotta Laugh: Life in the Trenches of the Health Insurance Business,” which will be published in late 2010 by Inkandescent Books. Our goal is to find a way to improve the U.S. health care system for everyone, and we truly believe that by talking about this issue and starting a conversation about what changes need to be made and how we can make them, we will be able to move mountains.

Each month, we’ll publish a chapter from the book on, dealing with an issue that has both amazed and confused us. This month’s insurance nightmare: If your client thinks she has maternity coverage, she may need to think again.

The situation

What do you do when you have it in writing from your insurance company that you have maternity coverage — but when you go to use the benefit, the customer service department tells you otherwise?

This happened to our client Randy, a nurse, who found out a few years ago that she was having her first baby. She was thrilled, of course, and immediately called the insurance company to confirm her pregnancy benefits — the essential first step prior to having any major test, ongoing therapies or any surgery.

To Randy, making the call was merely a formality, because when she originally purchased the policy years before, she was single and didn’t opt for the maternity rider. However, after she got married, she added maternity coverage because she knew she’d someday want to start a family.

Indeed, when she made the call to the insurance company, they confirmed that she had the insurance she needed. However, after her first checkup at the OB/GYN, she received a letter saying she was, in fact, not covered.

Panic ensued, followed by a slightly hysterical call to our office. We quickly phoned the carrier, and, unfortunately, it took two weeks of repeated calls to them to get the information we needed. At last, we received an email from a reliable supervisor confirming that the rider had been added and she was covered.

Fast forward to three years later. Randy once again is pregnant, and following proper health insurance protocol, she called the insurance company to notify them of her condition. Here’s the shocker: The agent on the line tells her she has no coverage. Surely this was a mistake, Randy thinks, so she hung up, composed herself, and called back.

This time, another agent told Randy that she had dropped her maternity coverage the day her first child was born. Who would drop coverage on the day they are in delivery, she asked? Most people in the throes of 27 hours of labor are not calling their insurance company.

Frustrated and confused, Randy called us and we remembered she received an email from the insurance company months earlier stating that she had maternity coverage. We both had saved the letter, and we promptly took it to the head of the claims department.

Still, despite the fact that the letter clearly stated that she had maternity coverage, it took three people making nine calls for four weeks to get a definitive answer that Randy did, in fact, have coverage and that the policy would pay for her delivery. What we never did discover was why the coverage was dropped in the first place. Who authorized the change? And why did it take so long to resolve the matter?

You gotta laugh.

Here’s how customers can take control

1. When our clients are even thinking about getting pregnant, we encourage them to call us, or their insurance carrier, to confirm that they are covered.

2. We tell them to be sure to get the name and telephone number of the person they spoke with, along with the department and supervisor’s name and telephone number, and the reference number for the call.

3. We also tell them to always write down the date and time that they placed the call.

4. When buying a policy, if they are of childbearing age, we always make sure they have maternity benefits.

5. We ensure they get a copy of their contract and review it carefully to be sure they are covered for all the potential situations that may require insurance coverage in the future.

If we were the health insurance ambassadors

If we were in charge of health insurance policy, we would require every carrier to clearly outline and explain what is covered in the policy. When amendments are made, the policy needs to be updated, and the customer needs to be notified. We would also post these changes on the insurance company’s Web site using easy-to-understand language.

Too often, this information is buried in the policy and is difficult — if not impossible — for consumers to understand. We’d also make sure that carriers were required to respond to issues like Randy’s within 48 hours, so as not to leave paying customers hanging. This is their health we’re talking about, and they are spending large sums of money and trusting that the insurance firms will fulfill their end of the bargain.

We often ask ourselves, why is this such a big problem? Is it corporate greed? Or are health insurance companies so big and bloated that no one knows what is going on? Either way, there obviously needs to be a change in the system.

What brokers need to know

The best brokers in the business understand the rules and how to use those rules in order to put the client in the best possible situation. But it is also important to explain these rules to the client so they can understand the value you are bringing to the situation.

The broker also must be able to look down the road and determine possible challenges that the client may face in the future. The better the client is educated, the easier it will be to implement proactive strategies now that will minimize future risk.

By implementing a strategy that goes beyond the immediate issues of today, the broker maintains viability for the long term. The broker should view the client relationship in the long-term and encourage a relationship that is a partnership.

The broker must be able to address changes in the industry quickly and intelligently. The client needs to know that you are on top of all developments. They need to see you as the irreplaceable expert. You need to be one of their most important advisors. The broker cannot become complacent about keeping up with developments.

In the end, being a good broker is hard work. The work never stops unless client says it does. By staying on top of the situation, you stay relevant. For us, that’s the only way to do business.

Want more? Read Part 2: Continuity of Coverage and Part 3: High Cost, Low Benefits at

Stephanie Cohen and Scott Golden are the co-owners of the health care benefits firm Golden & Cohen. Cohen can be reached at [email protected]. Golden can be reached at [email protected].


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