Insurance Insurance

Posted 10/19/2010

This is my own term for a new insurance policy that some entrepreneur should create for the US public. Stung by an insurance company and unable to collect your rightful benefits? Denied reimbursement for anything from a dental implant to a dented fender? Don’t fret: you have insurance insurance! Let the Big Boys duke it out among themselves.

When I was a much younger man, broke and in college, I had a variety of sales jobs, two of them accompanied by helpful career-inspiring mottos. There was encyclopedia sales (“the child who reads is the child who leads”) and life insurance (“there’s no man with endurance like the man who sells insurance.”)

When I set forth in an uncomfortable necktie holding my embossed insurance briefcase, I was assigned to sell a policy that paid only if and when the insured died of cancer. That’s right, just cancer. “It’s one honey of a policy,” my supervisor explained, “Everybody’s afraid of cancer, so we sell them fear relief. Of course, if the poor guy gets hit by a bus, his family doesn’t collect a dime. For that, we’ve got another policy…”

Lesson One: insurance sales capitalize on your personal worst-case scenarios. As in “You could lose your HOME, your HEALTH, your LIFE!” Anticipate the industry to eventually create weight-gain insurance, hair-loss insurance, and perhaps loss-of-faith-in-a-mainstream-religion insurance.

This career experience (at which I failed miserably) began my lifelong animosity toward the insurance industry. As a physician, I of course do battle with the industry in one form or another every day. And like most physicians, I have an employee whose full-time job it is to argue endlessly with insurance companies, trying to get us paid for services performed weeks, and often months, earlier.

In this health tip and next week’s, I’ll share some experiences and observations about insurance that may save you quite a bit of money. Today I’ll cover two forms of insurance that affect all age groups: disability insurance and trip cancellation insurance. Next week, we’ll discuss long-term care insurance because I see so many people buying it. I’ve written about health insurance in previous health tips, but now, with so many people uncovered, I’ll reiterate my thoughts about getting decent coverage at a reasonable price. But that’s next week.

Of car and homeowners insurance I have little opinion, except I don’t understand why my homeowner’s insurance didn’t drop in proportion to the pounding my property values took during the recession. Premiums certainly went up fast enough during the real estate bubble. But that’s insurance for you.

Lesson Two: insurance companies make money by not paying benefits to policyholders. The whole point is to keep your money.So that when you’re really ill and you apply for disability benefits and no check arrives, it’s nothing personal. It’s not you. Don’t burst into tears when you open your denial letter. They diligently and equally avoid paying everybody.

There are two forms of disability insurance: short-term (usually 3 to 6 months) and long-term (beyond 6 months). People usually get these policies as an employee benefit at their jobs and those who are self-employed often buy their own coverage.

When Dr. Rubin and I first opened WholeHealth Chicago, our insurance agent suggested we buy disability insurance for ourselves, “just in case.” “Why bother?” we answered, “You guys never pay your beneficiaries anyway. We know. We fill out the forms. We watch our patients’ uphill battles with your companies, helplessly sick and trying to collect some money at the same time. Tell us, have any of your clients ever actually collected disability?”

“Okay,” he said, “Let’s move on to property damage.”

And that’s it. With disability insurance, you may think you have coverage until you try to collect. With typical short-term disability, they’ll use so many delaying factors that usually you’ll recover and be so grateful to have your health back that you don’t bother trying any more to collect.

This, of course, is exactly what they hope for. The delay tactics they use are truly evil. “We never got your application,” they shrug. Or, shifting the blame to “your doctor never sent us the forms” or targeting a typo, as in “we checked with your employer and your dates are wrong.” Then there’s the “we want more (evermore) information” and “you’ll need more evidence…is your doctor a specialist? We’ll send you the name of our specialist in your area.”

And all this time, you yourself are sick, remember? You try your best to get your payout, but you feel awful. You’re weak, worried about your future, and not thinking clearly. Your susceptibility to their delaying tactics is, of course, their trump card.

Long-term disability is even harder to collect because there’s more money involved. You’ve got a pretty good chance of collecting if you’ve had a serious stroke, are dying of cancer, or had a heart transplant. What all these conditions have in common is that, actuarially speaking, your days are numbered and they’re betting they won’t be cutting you checks for long. However, for just about anything else, you’ve got an uphill battle ahead.

Patients with the chronic conditions I treat most often–fibromyalgia and chronic fatigue syndrome–are almost always routinely denied because there are no “positive” tests for these conditions. But if they do apply, they can expect to be badgered by company physicians whose salary is predicated on finding evidence to deny claims: “Well, there’s really nothing wrong with you, is there?” or (and this is an actual quote) “I bet you’re just sitting at home eating bon-bons and watching TV.”

If you’ve applied for long-term disability, don’t be surprised if you’re followed by a detective and your movements recorded to be used in evidence against your claim.

Ultimately, of course, most disabled people just give up, but like everything else the squeaky wheel gets the grease and if you’re disabled and feel you’re entitled to benefits and hire an attorney, you have a reasonable chance of getting them.

Some years ago an eminent cardiologist friend of mine lost the use of his hand and was unable to perform cardiac catheterizations. When he applied for replacement income under his disability insurance, he was told he could be a general practitioner or a psychiatrist. He took them to court and won in a punitive suit many times what his benefit would have been. As an added twist, he then went to law school and is now making an enormous living as a plaintiff’s attorney suing insurance companies. (They should have paid him in the first place.)

Eventually, the chronically disabled of any age can apply for Social Security Disability, but this is a long process (average two years) and often requires the help of an attorney. I think it’s worth the effort because the attorney’s fees are paid from your settlement (you’re paid from the day of your application), and although the checks are always less that you expect, you’re also eligible for early Medicare coverage.

Oh, yes–I almost forgot about trip cancellation insurance. In my decades of filling out forms for patients who became ill before a pre-paid vacation, I have never seen a single patient collect a dime. One very well-off patient had to cancel a $25,000 trip due to a back injury. The company combed through years of her medical records, found she’d injured her back 20 years earlier (she’d forgotten about it), and denied payment based on the now-familiar “pre-existing condition.”