With the annual rite of "open season" in full swing, I am once again struck by the irony of the process. On the one hand, there are so many choices: different insurance companies, different plans, different rates, different levels of coverage.
In another sense, however, the choices are almost meaningless. We are denied basic information that we need to make accurate comparisons and smart decisions.
My husband and I learned this the hard way last year. After years of struggling with a plan in which we had to put out the money for doctors' visits and then submit claims for reimbursement, we decided to pick a managed care plan in which most of the costs are covered up front, as long as we used physicians who are members of the plan. We wanted a plan that would include our children's pediatrician and, just maybe, let us cut back on our endless paperwork.
It seemed simple enough, especially because I'm in the insurance field--sort of. I am a lawyer who specializes in representing policyholders against insurance companies, often in health and disability cases.
But things are not always what they seem.
I started by asking our pediatrician which plans he participated in, then began downloading information about them off the Internet. Problem One was that they all had warnings to the effect that: "the continued availability and/or participation of any one doctor, hospital or other provider cannot be guaranteed."
This meant that our family would be stuck with whatever plan we picked, even if our pediatrician dropped out or if the plan decided not to renew its contract with that doctor. This is a major flaw, since we--like many people--were picking the plan because of the doctor.
It turned out that our concern was prescient. By May, our pediatrician in fact dropped out of the plan we chose last fall. So did my primary care physician.
Once our pediatrician's status changed, I began checking to see if we could continue seeing him and be reimbursed by the plan. We could. The plan boasted, "For eligible self-referral services, the Plan pays 80 percent of the allowable benefit after you pay a $200 calendar year deductible for an individual, or $400 for a family."
Af first, this sounded fine. But then I re-read the subtle words: "allowable benefit."
The plan, you see, was not promising to pay 80 percent of what is billed by out-of-network doctors. It only was promising to pay 80 percent of what it thinks those doctors should bill.
This meant that, to figure out what the plan really offered, I needed to know, for starters, what the "allowable benefit" would be for a run-of-the-mill visit to a Bethesda pediatrician.
This is where the information flow stopped. Officials at the plan refused to answer. All I got, after repeated phone calls, was the illogical explanation that "actual charges vary from moment to moment," so they couldn't say what they would pay when I submitted a claim. Yet they also declined to tell me what the "allowable benefit" was at the exact moment we were talking.
This is, of course, all nonsense. Retailers know what their competition is charging. Professionals can easily find out each other's billing rates. We all know how much the health plans ask us to pay in premiums. It is ridiculous for them to refuse to say how much of our claims they intend to pay.
In addition, nothing about insurance company fee schedules is truly confidential. Many states require insurance companies to post certain fee schedules--sometimes called the usual and customary rates--with insurance or health departments. With some digging and a few Freedom of Information Act requests, it's possible to obtain this publicly filed information.
What's going on is that the insurance companies are simply taking advantage of the general confusion about health insurance and managed care. In this situation, people can be shortchanged when they seek reimbursements of out-of-network claims--without ever knowing it. After all, they never knew what the insurers were supposed to pay in the first place.
Picking a health plan without knowing its fee schedule is like buying a car without knowing what it costs. It's like being told by a car salesman, "Decide whether you want the six-cylinder engine or the four. After you sign the contract, we'll set whatever price we want."
This is a problem throughout the industry--not just the federal health plan system. Maybe what we need is a change in the entire system where all plans--federal and private--are required to start revealing this type of information. That's when we will start to have true consumer choice during open season.
Rhonda D. Orin is a lawyer at Anderson Kill and Olick in the District.