Kids and Health Care: If You Have Trouble Making a Claim Introduction

The 1990s saw increasing insurance litigation -- fueled by more aggressive attempts by insurance companies to challenge or reject claims and a public backlash against the industry, especially managed care plans. In 1999, U.S. health care consumers made more than 35,000 complaints to state insurance departments about managed care plans and other health care insurance companies, according to the National Association of Insurance Commissioners. The most frequent complaints involved claim denials, disputed claims and slow payments by insurance companies.

The work that you put into getting health insurance for your family comes to a point when it's time to make a claim for your child's medical care. Even with the best coverage, getting claims paid can be difficult. Problems don't surface until you make a claim that is denied or underpaid; then, many of the same issues that influence how much the coverage costs also influence how the plan pays claims.

This chapter will point out ways that you can make a claim effectively.

Insurance is a process. It's a business built on contracts. Making a claim is like any other contractual transaction; it often takes more time than you expect.

The main contract -- the insurance policy -- states how claims will be paid. But beyond this simple start, within the parameters set by the contract, there's room for negotiation and compromise. Often, the insurance company or managed care group is counting on that room to work to its advantage; it employs people who spend their days reading and enforcing insurance contracts.

But there's room in the contract for you, the policyholder, too. If you don't like the fact...or the manner in which...a claim was denied, you can press your issue. Your pressure will usually need to start within the insurance company's own appeals process. If that doesn't accomplish anything, you can press on to regulatory agencies.

The most common mistake people make when they have trouble getting a claim paid is assuming that the insurance company or managed care group has more authority than it really does. Insurance companies don't have any special power over policyholders -- both sides are simply parties to a contract.

Lawsuits or regulatory complaints relating to delays or denials usually allege bad faith on the part of the insurance company. This is one of the heaviest clubs a policyholder can wield to strike back at an insurance company.

One way in which an insurance company can act in bad faith is by not investigating a claim with an eye toward providing coverage.

And remember: Insurance companies are in business to make a profit. But their business is a regulated one; they generally don't want bad publicity. This will usually -- despite how their employees act -- settle disputes that they can't avoid. If your position is well-reasoned and consistently made, you may get more satisfaction than you might expect at first.