So, you’ve studied your health insurance policy front and back – you know all about deductibles, exclusions, and co-payments, but there’s probably a lot more you don’t know about your insurance provider. That’s because health insurance companies have more than just a few secrets. There’s plenty of information they aren’t exactly open about with the public and yes, some of it could affect you. From their earnings to where your premiums go, your health insurer is probably keeping something from you. Here’s a look at several health insurance secrets you probably never heard about.
Health Insurer Secrets
As an agent, I often find myself having to explain what a domiciled carrier of Florida means or what one should infer should they consider obtaining insurance coverage through a carrier who is not a domiciled carrier of Florida. For instance, United Healthcare is domiciled in Indiana; while their insurance plans have their advantages they also have their disadvantages as any other insurance carrier. However, my concern lies mainly in the fact that they are not domiciled carriers of Florida since they are association based and are essentially exempt from rate regulation. I am not going to delve into neither the advantages nor disadvantages that may exist in their insurance plans; although I feel it is imperative that this fact be expressed explicitly. The policyholders who are aware that they are paying an additional $3.00 a month on their premium (the monthly dues to the association in this scenario it would be FACT an independent consumer association) feel that the $3.00 FACT fee grants them discounts on an array of services that include anything from vision services to amusement park discounts. In addition, they may be under the misconception that they have lower premiums since they are part of a group association which would subsequently assume a bigger risk pool – hence the “lower premiums”.
And that’s about as far as I’ve heard from both consumers and most agents if that; so here’s the catch, and the underlying element of the plan that no one seems to know. This is an excerpt derived from a publication in which was basically a review of Florida laws in relation to rates and individual insurance coverage: Out-of-State Group Policies — The state law generally exempts out-of-state group policies from rate regulation. The rating requirements described above do not apply to such policies, which are marketed to individuals in Florida, but are issued to a group or association outside of Florida. Insurers issuing out-of state group policies may engage in rating practices that state law prohibits for policies issued directly in the state, except that the small group guaranteed-issue and community rating requirements apply to coverage sold to a small employer in Florida under an out-of-state trust or association policy. Functionally, this product is very similar to individual coverage. An individual contacting an insurance agent to purchase health insurance will often be offered coverage under an out-of-state group plan and the consumer is not likely to know the difference, even though the policy itself must contain disclosures that state law does not apply.
- Your health insurance provider may give financial incentives to doctors that give you treatment based under the company’s “best practices.” Best practices are generally meant to reduce your chances of chronic conditions and ultimately reduce health care costs, but it might not always be the best form of treatment for you.
- In the majority of states, you cannot sue your health insurance provider in civil court to hold it responsible for treatment decisions. You can only sue in these 17 states: Arizona, California, Georgia, Illinois, Maine, Minnesota, Missouri, New Hampshire, New Jersey, North Carolina, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Washington and West Virginia.
- According to recent data, health insurance companies earn over $700 billion a year, but only have a 3% profit margin. That’s because the majority of money you put into a health insurance plan actually does go toward medical services, prescription drugs, and hospital costs.
- A good portion of the money you spend on health insurance is being put toward unnecessary medical tests or procedures. With so many people looking to cash in on any mistake doctor’s make, more doctors are starting to feel the need to be overly cautious with patients so they aren’t found liable for something later.
- If you have any type of problem with your health insurance company or their practices, you can take your complaint to an external review board in most states. The only states without an external grieving practice are Idaho, Mississippi, Nebraska, North Dakota, South Dakota and Wyoming.
- Some insurance companies can legally take part of your injury settlement from a car accident to recoup the costs of your medical care. This practice is known as subrogation and must be included in your original policy agreement.