Healthcare Reform opens up whole new vistas for improving the customer experience, but if the story I am about to share with you is any indication, the horizon is far, far away when it comes to individual health insurance.
One of our part-time employees, Becky Clark, recently undertook an odyssey with her husband – they needed to buy individual health insurance for their family because Heath was going out on his own as a healthcare attorney.
What they experienced as young and healthy buyers is sobering as the nation gets ready for millions of people to purchase individual health insurance through the exchanges envisioned by the Healthcare Reform.
I’ll let Becky take it from here:
Even though we both work in healthcare – and I deal with a wide variety of patient satisfaction research on a continuing basis — we were unprepared for the experience of buying individual insurance.
Our goal was to spend $500 or less a month for our family of four. We dealt with a broker, an insurance company and an association. The initial process of getting a quote wasn’t bad — the only questions they asked were: Age, gender and smoke/not smoke. But that was only the beginning of what was mostly a very frustrating customer experience.
We went to see a broker for one of the largest insurers in the state and got initial monthly quotes ranging from $400 to over $1,000, depending on the nature of the policies. The only reasonably priced policies were high deductible HSAs, so we applied for a $7500 deductible HSA.
We applied online – and the application process was intense and violating. There was a checklist of at least 50 questions regarding medical conditions or illnesses. If we had ever been treated for one, we had to go deeper for a detailed explanation.
We had to recall all doctor visits over the past 5 years and all conditions we’ve ever been treated for in our lives, how long we were treated, the physician that treated us, his/her location, and whether or not the condition was resolved. We also had to list all medications taken over past 10 years and why.
This may sound like a simple process to some, and we thought it would be easy to recall all this information, but it took hours! And we are very healthy people. We both are at or below ideal weight, exercise on a regular basis, eat well, don’t smoke, enjoy a glass or two of wine, have no chronic conditions and have no serious family history going against us. We have a pretty boring medical history – which is good!
But our son was scheduled for a procedure once he reached 6 months of age. Even though doctors told us that once the procedure was done, the problem should be taken care of and even though it is by no means a chronic issue, it still raised a red flag. This particular insurance company raised his rate 300%.
I called to ask why, and they said that with the changes brought by healthcare reform, children could not be denied coverage for pre-existing conditions. Since they had to cover this “condition,” the price of the policy was raised by a few hundred dollars a month.
And can I just say that I heard back from this company the next day with the increased rate. They did not take the time to look at medical records or ask any questions. Just a simple increase of 300%.
The insurance company
So I forgot to mention that when shopping for individual health insurance, you have to decide if you want maternity coverage or not. Don’t all plans provided through an employer offer maternity coverage – no matter what?
We are pretty sure that we are done having kids … but no permanent measures have been taken to prevent that. Human error is always possible. When my husband’s cousin unexpectedly became pregnant, we learned that they, too, had individual health insurance and elected not to get the maternity coverage. They, too, thought they were done having kids. So we decided to opt for the maternity coverage, which of course, is much more expensive.
We had begun to explore purchasing coverage directly from another insurance company. But with the decision about maternity benefits, this was no longer an option. They didn’t offer maternity benefits
So yet again, we were forced to keep shopping.
Our journey took us next to a trade association that offered coverage partially administered by the same insurance company represented by the broker. Got that?
Even though the insurance company administered the plans offered by the trade association, the offerings themselves were different and the trade association did its own underwriting. The good news: maternity benefits could be included.
There were five different plan options, and different deductibles within each plan. I was extremely impressed with many of the offerings. The plan that we applied for actually had everything I would want: it’s a PPO, fairly low deductible, good coverage, dental and vision. Wow! I thought it was too good to be true – and it was reasonably priced, according to the quote. So this was the plan we wanted and we were extremely anxious while waiting for the underwriters.
The final application we completed was on paper and mailed to their corporate office. We waited three to four weeks to hear back. They requested my son’s medical records, which we provided in a timely manner. They actually took time to review medical records — not just see a scheduled procedure and immediately respond by jacking up the rates.
At one point, I called to check the status of our application, and they were able to tell me that two underwriters review the application. One underwriter had signed off on it and they were waiting for the second to review it. I was really impressed that they were able to provide me with that information.
So another week went by and we received notice in the mail that we were approved for their policy. They raised our rate because of our son, but it was only about $50 a month. And they listed two other heath issues with our kids that raised concerns, so I’m sure those were included in the $50 increase. They excluded chiropractic care for me, which no other underwriters did. I hadn’t been to the chiropractor in over a year, but I had gone maybe once a month for the previous few years just to keep my back comfortable with running and because hauling around two kids all the time takes a toll on the back.
I can’t tell you how relieved we are to have a policy that includes all we want, with a reasonable deductible, and that costs under $500 a month.
What I learned about the customer experience
But even with that good result, our total customer experience was frustrating:
• The overall process is a mystery to my husband and me, even with our healthcare backgrounds. You call up a company, get an immediate quote based on age, gender and smoking, then you are to use that information to decide if you want to invest the time and energy in their application process. And it’s just a quote – more than likely, it won’t be that low!
• Maternity coverage should not be an issue. No one should have to fret and worry about health insurance if they find themselves pregnant. (There are other reasons to panic about pregnancy – this should not be one of them!)
• There is obviously a huge discrepancy between obtaining health insurance individually versus through an employer. Employers never ask if you smoke or are overweight or have chronic issues or if you took this medication 10 years ago. I suspect over half the employees in this country would not qualify for individual health insurance, and if they did, it would not be affordable.
• The link between health insurance and employment status is frustrating. My husband started his own law firm – a small business. While starting your own business is wonderful, health insurance has been the biggest barrier. I don’t know how many times we thought – “OK, at what price point do we go close up and go back to corporate employment?” The cost of health insurance should not be the barrier that it is to self-employment. Efforts should be focused on business development and client work, not shopping and paying for health insurance, especially when your business model is no work; no pay.
• There is still much work to be done by insurance plans to improve the customer experience. The differences between how we were treated by the first company we checked with and the one we ultimately chose are ample evidence of that.