Penny-wise and a Pound Foolish?

Author:

Nicole Vij

July 27, 2010

Issue Areas:

Cost, Coverage

Cost containment within the United States health care system has been a big issue for quite awhile now. After reading the story of La Rosa Carrington from Colorado Springs, Colorado I fear denying coverage to patients long has been the health insurance industry’s preferred method of containing costs.

La Rosa Carrington, a single mother, has been battling leukemia and receiving chemotherapy five days per month. The problem started after she lost her job and tried to utilize the federal law that allows those who meet certain eligibility requirements to temporarily maintain coverage under group health insurance from their employer (COBRA). Carrington understood that under the 2009 American Recovery and Reinvestment Act, she would be required to pay 35 percent of the full COBRA premium. Since she wanted to maintain coverage and had not yet received a bill showing what her new payment would be, she used a calculator to figure out that she owed $165.15 a month and sent a check for that amount to Discovery Benefits, her employee benefits administrator.

Shortly thereafter, Discovery Benefits, informed her that she had not paid enough and, therefore, her coverage had ended and could not be reinstated. Upon calling Discovery Benefits Carrington was informed that the difference between what she paid and what they calculated that she owed was one penny.

So in effect, Discovery Benefits was able to deny chemotherapy and medical coverage to Carrington because she was a penny short. Was it really the penny shortage or was it Discovery Benefits’ standard operating procedure to find any reason to deny high cost consumers coverage? They spent more money to inform her that her coverage had been discontinued than it would have cost them to pay the penny themselves.

It appears to me that preserving profits may have been a higher priority than covering their plans’ beneficiaries.

There is a happy ending for this case because after Carrington took her story to the media, Discovery Benefits determined that they had made a rounding error in reference to Carrington’s billing and that she did in fact pay them exactly the amount she owed them. Her coverage was reinstated.

In my opinion, the last thing anyone trying to fight for life, needs is to be told that health insurance benefits have been terminated for non-payment of a single cent. This story raises concerns about the profit motives’ impact on our health system as a whole.

There is no question why health insurance plans and insurers have become the public scapegoat for what ails America’s health system. It is stories like that of La Rosa Carrington that fuel the fires of public anger and antipathy. If we as a country are committed to containing costs, increasing quality, and creating a fair and equitable health system, we must remind ourselves that health insurance reform cannot survive without comprehensive health system reform. Nonetheless, it would help if all health insurers in the meantime worked harder to make themselves less obvious targets of public ire. After all both the health system and the needed reforms are extraordinarily complex and require the development of a strong public consensus about something greater than how awful insurers business processes may be. Health reform is really all about - the moral character of our country.