California Insurance Lawyer Blog

A November 18, 2010 article in the Business Section of the Los Angeles Times reports that costs for health insurance benefits for employees have risen 8.4% this year in California. The rise in costs for health benefits was greater in California than nationally which only saw a rise of 6.9%. The article attributed the cost increase to employees possibly using more healthcare services for fear of losing their coverage if they are laid off.

Employer-provided health benefits are traditionally the best coverage available and lowest rates for participants. However, at the end of the calendar year, when most employers will update their benefit plans, it is important to review the health benefits that are provided by your employer and any changes for the next calendar year. For example, employers may notify employees that benefit deductibles or co-pays may be increase. The article states that “California employers said they expected to hold their cost increases next year to 7.8% by changing the benefits they offer or by picking new insurance vendors.” The implication is that California employers will attempt to curb cost increases by reducing employees’ health benefits.

Furthermore, if you are facing a job loss, your employer is required to notify you of your rights under COBRA, the federal act which provides employees the opportunity to continue their health benefits after their job termination for a limited period of time. Additional information on COBRA notification may be found at the Department of Labor website: http://www.dol.gov/ebsa/cobramodelnotice.html

ANSWER: It depends...

Most people think that if they have health insurance coverage, at the very least it will provide coverage if they get in a car accident or have some other catastrophic injury. However, this is often not the case. Many health insurance policies require that in-network services be used even when emergency services are required. If you are traveling or if the closest available hospital is not an in-network provider, you may end up being responsible for significant charges well in excess of what your liability would have been at in-network facility. In emergency situations, particularly if emergency surgery is required and/or is performed by out of network doctors, the out of network fees and costs can be astronomical. While it is often impossible in emergencies for you to demand or even know if you are being taken to an in-network hospital, it is important to know some of the basic policy requirements to try to protect yourself from unnecessary medical debt.

One common requirement is that you advise your insurance carrier within 24 hours or 48 hours if you have been admitted to an out of network facility. As soon as you or your family member learns that you are at an out of network hospital, request that you be transferred to an in-network facility. Often the hospital will contact your insurer as soon as possible after you are admitted. Once the hospital is aware that you are at an out of network facility and that you are requesting a transfer, it is in their best interest to attempt to negotiate an agreeable rate with your insurer. Most policies contain a provision that the insurer has the authority to agree to an acceptable rate. Further, if you are not in stable condition, it is in the best interest of the hospital and the insurance carrier to not jeopardize your health and so often a deal will be struck for the hospital to accept the in-network rate or the for the insurance carrier to pay a little more.

However, all policies differ, and HMO and PPO plans vary greatly in the types of requirements for emergency situations. It is important to read your policy and make sure that you and your family members are aware of the requirements to avoid excessive charges.

Also, don't always take what your insurance company tells you on the phone as the final word. Often, claim representatives read from standard scripts that may not accurately reflect your rights. If you have any questions whatsoever, it is wise to put the questions in writing, and to demand written responses from your insurance company. Of course, if you still have questions, or problems, contact a lawyer with experience in this area as soon as possible. Many lawyers handle cases like these on contingency, so you may not have to come out of pocket in order to get the help you need.

MetLife announced this month that it would stop selling Long Term Care (LTC) insurance. The company cited financial challenges with this segment of the insurance market.

According to the Wall Street Journal, MetLife is among the bigger sellers of the coverage, with about 600,000 policyholders, or about 8%, among the eight million who have long-term-care insurance in the U.S., according to the company and an industry trade association.

We suspect MetLife determined that Long Term Care insurance will have significant, and increasingly greater numbers of claims as the Baby-Boom generations age. To make the insurance profitable for the company, MetLife would have to charge much higher premiums than the current going rates. With widespread unemployment and a struggling economy, now is probably not the best time to sell a product that, to most, would be out of financial reach. Other companies are also obviously feeling the pain as they too are either scaling back their LTC offerings or seeking approval for drastic premium increases in order to stay financially healthy in view of present and anticipated claims experiences.

What does all of this mean to you, the individual who is either contemplating the purchase of such insurance, or worse, dealing with an LTC benefit denial? It means the carriers aren't very good at underwriting this risk, and so they will probably continue to jack up premiums, and deny benefits wherever they can. Buckle up, and proceed with caution and care. In the case of claims, seek legal advice at the first signs of your insurance company giving you trouble, or making repeated or burdensome demands to support your claim.