Do You Know What You Are Getting When You Buy Health Insurance?

You many consider yourself a very savvy consumer. You may have researched all the best advice on how to choose a health care plan. You may have even scoured the National Commission for Quality Assurance report cards on the plans available to you. But you still would not know what you are getting when you enroll in a plan.

You would know the basics of course. Do you have a deductible? How much do you have to pay for a specialist doctor visit? Does the plan cover chiropractic care?

What you wouldn't know—too often even if you called to ask the plan directly—is under what conditions it covers the specific care you may need. Just because a plan "covers" a certain medical treatment or service doesn't necessarily mean it will cover it when you need it. It is covered only if the plan considers it medically necessary for you at the time you request it.

How do they decide what is medically necessary for you? That is the $64,000 question to which we can't seem to get an answer. At least not from the private health plans.

In her Congressional testimony on April 2, 2009, Diane Archer from the Institute for America's Future, also described the problem of lack of information available in the private health insurance market:

"Even FEHB [Federal Employee Health Benefit] plans, it appears, are not required to disclose such information. One new Congressional staffer recently was forced to stay on his family's COBRA policy rather than take the risk of inadequate coverage... [as a federal employee] because the [private] FEHB plan would not tell him what services they would cover or how much he would be obligated to pay."

If you are enrolled in the public Medicare plan, on the other hand, you can easily find out. Medicare, the federal health insurance program for people over the age of 65 and people with severe disabilities, makes that information publicly available on its web site for all to see. It even has a period for public comment before it makes its 'coverage determinations' final.

For example, if you have diabetes does your plan cover diabetes self-management training? And if your plan does cover it, do you know what criteria you have to meet for it to be covered? You would if you are enrolled in the public Medicare program:

"The training must be ordered by the physician or qualified nonphysician practitioner treating the beneficiary's diabetes. The order must be part of a comprehensive plan of care established by the physician or qualified nonphysician practitioner and describe the training that the referring physician or qualified non-physician practitioner is ordering and/or any special concerns such as the need for general training, or insulin-dependence... Outpatient diabetes self-management training is classified as initial or follow-up training. When a beneficiary has not yet received initial training meeting the quality standards of this section, they are eligible to receive 10 hours of initial training within a continuous 12-month period. The 12-month period does not need to be on a calendar-year basis. Nine hours of initial training must be provided in a group setting consisting of 2 to 20 individuals who need not all be Medicare beneficiaries unless the ordering physician or nonphysician practitioner certifies that a special condition exists that makes it impossible for the beneficiary to attend a group training session..."

You may not understand the technical jargon of the answer, but your doctor certainly would be able to tell you meet the outlined coverage criteria. In a private health insurance plan you generally would not know the answer until you get the claim rejection notice. Even then you will probably have a hard time figuring out under what conditions it would be covered—you would only know you didn't meet them.

As Karen Pollitz, Research Professor at the Georgetown University Health Policy Institute, testified before the House Committee on Energy and Commerce, Subcommittee on Health on March 17, 2009:

"In our present health care system, and particularly private health insurance markets, several key shortcomings must be addressed as part of an overall effort to assure universal coverage. These include... Rising costs... Lack of transparency and accountability."

Pollitz, whose areas of expertise include regulation of private health insurance plans and markets, managed care consumer protections, and access to affordable health insurance, later explains the importance of including a public health insurance option in health care reform:

"Importantly, a public health insurance plan option should also be offered to heighten competitive pressures to contain costs. A public health insurance plan can substantially influence market innovation by investing in new approaches to disease management or more effective use of information technology. Such innovations should be freely shared with other insurers so they could adopt them at lower cost. A public health insurance plan also could induce other insurers to be tougher price negotiators with providers."

In her Congressional testimony Archer expounded on the problems caused by lack of transparency in the private health insurance industry:

"The health insurance market is broken. In a competitive market, insurers would be marketing to health care users, demonstrating why they deliver the best value health care for people with cancer, diabetes and heart disease. Their message would appeal to the 20% of the population who consume 80% of health care dollars. Instead, if they deliver great care to people with costly needs, they don't want people to know. It's like the automobile companies marketing their cars to people who don't drive much.

"Twelve years ago, in a New York Times Magazine cover story, Helen Darling, then manager of health care strategy and programs for Xerox and now President of the National Business Coalition on Health made this point very succinctly: 'I have been sworn to secrecy by one plan that has the best AIDS program in the world. They don't want people knowing about it. They couldn't handle the results. Ideally, if we lived in a wonderful world, we would want a plan to win prizes for their wonderful care. But in reality that would kill them.'

"To maximize their profits, health plans compete for enrollees least likely to use their product. Therefore, health plans do not advertise the specific treatments and tests covered, the conditions under which they are covered or the price of services. This is precisely the information we need to know.

"Different private plans offer different value health care. The best of them come between doctors and their patients to ensure good care is received. Yet, their medical necessity and utilization review decisions are largely considered proprietary and unknown. And, we don't know whether their interventions add value, or simply increase their profits. For one example, a September New York State Medical Society survey revealed that 90% of doctors said they have had to change the way they treat patients based on restrictions from an insurance company; and 92% said insurance company incentives and disincentives regarding treatment protocols 'may not be in the best interest of the patients.' We need to be able to understand the conditions under which insurers direct the care doctors provide their patients and the extent to which insurer behavior reins in costs and drives value or keeps people from getting needed care."

Archer went on to explain why a public health insurance option is needed if we are to get any real transparency from private insurance companies:

"Regulations will never address the insurers' obligation to put profits first. But we can drive accountability if we require the insurers to disclose their claims and denial data, their provider rates, their medical necessity and utilization review protocols.
"A public health insurance option is also essential. A public health insurance option sets a benchmark for coverage, drives competition among oligopolistic insurers to rein in costs and, through its willingness and ability to be transparent and accountable, can promote the value and system-wide change that is needed to guarantee everyone in America quality, affordable health care."

Dr. Howard Dean, the former governor of Vermont, has started a petition drive to:

"Give America a choice. We support healthcare reform that allows individual Americans to choose either a universally available public healthcare option like Medicare or for-profit private insurance. A public option is the only way to guarantee healthcare for all Americans and its inclusion is non- negotiable.

"Any legislation without the choice of a public option is only insurance reform and not the healthcare reform America needs."

Dr. Dean has said:

"If Barack Obama's healthcare plan gets changed to exclude a public option like Medicare, then it is not healthcare reform. Legislation rises and falls on whether the American public is allowed to choose a universally available public option or not."

Stand with President Obama and Dr. Dean to demand the choice of public health insurance!
Sign the petition today.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future