When Health Coverage Doesn't Hold Up
As more Americans are unable to get health insurance through their work, they often turn to the individual insurance market. Last night we told you how difficult it can be to get individual insurance, with companies turning down people with the most minor of medical problems. CBS News chief investigative correspondent Armen Keteyian takes a closer look at what happens when some people who actually have individual insurance try to collect on an expensive claim.
Walking along a stretch of road last summer, 54-year-old Tod Smith felt an intense burning in his chest and tightness in his arm — signs of a heart attack he never saw coming.
"I was in good health," Smith said. "No major health problems or conditions."
For Smith, an illustrator of children's books, his heart attack was the first shock. The second: more than $40,000 in medical bills his insurance company refused to cover — after he figured the company, Assurant, would pay.
"I certainly figured that a heart attack was a catastrophic event. So I figured I was covered," Smith said.
A two-month CBS News investigation of the individual insurance market found that Smith's experience was far from unique. Because it was expensive, his claim was investigated for fraud by Assurant Health, his insurance company.
After examining his medical records, the company refused to pay based on a 3-year old-reference to an "angina episode." Assurant said those words proved his condition was pre-existing, despite the fact that follow-up tests in the same file diagnose his "episode" as a case of acid reflux and ruled out a heart condition.
"The claim about these pre-existing conditions was absolutely preposterous," Connecticut Attorney General Richard Blumenthal said.
"What this company did was create the illusion of coverage, when in reality, it would challenge almost any expensive procedure as a pre-existing condition," he said.
CBS' investigation of Assurant found a pattern of questionably denied claims and cancelled policies — and what a South Carolina judge called a culture of "secrecy, concealment … and shredded documents."
A video deposition from another court case describes what may have been cash incentives to the company's medical director to deny claims after the fact.
Diane Winkowski, a former unit supervisor of Assurant, said she was part of a unit at Assurant that searched for reasons not to pay claims. She told us she quit because, she believed, many of the investigations were unfounded — and unjust.
"A lot of time we felt that we had it all, and to try and keep looking was frustrating," she said.
Assurant refused to discuss its denials of claims on camera, but it issued a statement saying it continually evaluates its claims process "to ensure it is fair, equitable and consistent with state laws and industry standards."
However, at least 15 states have investigated Assurant's practices, forcing the company to pay millions of dollars in fines. The company now faces dozens of customer lawsuits, with another on the way — from Tod Smith.
"It's about money," Smith said. "That's the bottom line."
Smith hopes his legal action will cover that $40,000 bill he felt assured his insurance company would pay.
Copyright 2009 CBS. All rights reserved. Walking along a stretch of road last summer, 54-year-old Tod Smith felt an intense burning in his chest and tightness in his arm — signs of a heart attack he never saw coming.
"I was in good health," Smith said. "No major health problems or conditions."
For Smith, an illustrator of children's books, his heart attack was the first shock. The second: more than $40,000 in medical bills his insurance company refused to cover — after he figured the company, Assurant, would pay.
"I certainly figured that a heart attack was a catastrophic event. So I figured I was covered," Smith said.
A two-month CBS News investigation of the individual insurance market found that Smith's experience was far from unique. Because it was expensive, his claim was investigated for fraud by Assurant Health, his insurance company.
After examining his medical records, the company refused to pay based on a 3-year old-reference to an "angina episode." Assurant said those words proved his condition was pre-existing, despite the fact that follow-up tests in the same file diagnose his "episode" as a case of acid reflux and ruled out a heart condition.
"The claim about these pre-existing conditions was absolutely preposterous," Connecticut Attorney General Richard Blumenthal said.
Blumenthal's office has investigated dozens of the more than 500 complaints nationwide against Assurant, a Milwaukee-based company that specializes in individual policies. Blumenthal charges Assurant has a pattern of "bad faith" when it comes to its customers.Check out our individual insurance resource page
Watch Keteyian's interview with Maria Locker, who was given the health-care run-around when diagnosed with lymphoma
"What this company did was create the illusion of coverage, when in reality, it would challenge almost any expensive procedure as a pre-existing condition," he said.
CBS' investigation of Assurant found a pattern of questionably denied claims and cancelled policies — and what a South Carolina judge called a culture of "secrecy, concealment … and shredded documents."
A video deposition from another court case describes what may have been cash incentives to the company's medical director to deny claims after the fact.
Diane Winkowski, a former unit supervisor of Assurant, said she was part of a unit at Assurant that searched for reasons not to pay claims. She told us she quit because, she believed, many of the investigations were unfounded — and unjust.
"A lot of time we felt that we had it all, and to try and keep looking was frustrating," she said.
Assurant refused to discuss its denials of claims on camera, but it issued a statement saying it continually evaluates its claims process "to ensure it is fair, equitable and consistent with state laws and industry standards."
However, at least 15 states have investigated Assurant's practices, forcing the company to pay millions of dollars in fines. The company now faces dozens of customer lawsuits, with another on the way — from Tod Smith.
"It's about money," Smith said. "That's the bottom line."
Smith hopes his legal action will cover that $40,000 bill he felt assured his insurance company would pay.
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I was not pointing my frustration at you
This country is becoming another third world *** hole and I do blame it on all those who claim how great Bush is, and how he is the right man for the job back in the last two elections. Their ignorance and stupidity is costing us big time. Who says ignorance isn't expensive!
Too many people are willing to sell their soul and the sovereignty of this nation for the all mighty dollar.
Here is a idea. Why not combine L&I / Medicare and a national health care program together to streamline costs. Why pay 2 or 3 times for the same thing. I am not against health insurance companies per say I just don't want to be forced to rely on their greedy *****. This country has become too corrupt to ever solve any of our social needs without mass demonstration of the American people. I am however, afraid that the American people are too well trained as sheep to ever do that.
Does a car insurance company insure a cars windsheild if its already broken? so why would a health insurance company insure a persons back that is broken?
Common sense people.
Uh huh%u2026..and just how did you miss all the DOCUMENTED instances of the 4 major California Health insurers turning people down for exactly those conditions or the cases settled by the same insurers for dropping coverage of non-group policies when the person later became seriously ill? (Give you a hint: the CA Atty General was prosecuting the cases.)
Denial of reality ecause of ignoranace is just that - ignorance. Denial of reality because it contradicts your set beliefs is bad for your mental health.
(1) %u201Cnever smoked or drank, I am a 49 yr old "white woman" that has been a 5 ft, 100 lbs., size 0 for years.
I was just declined coverage because I gained to 130 lbs., size 6!!! height/weight variance. Posted by pmcalifornia
Oh please%u2026. 30 years go there was no such thing as a Size 0. That is an invention of the last 3-5 years. What is now called a Size 0 was a Size 6 only 8 %u201310 years ago. I have a closet full of Brooks Brothers, Talbots and Lilly Pulitzer (uber-expensive stuff) that I bought over the years that is all marked Size 6. Now according to the clothing manufacturers who lie through their teeth, I am a Size 0 %u20132. Right %u2013 and the current Size 0-2 clothing measures exactly the same as the current Size 0 %u2013 2. You are not a Size 6 darling %u2013 you are what we used to call a SIZE 10-12 which was a huge size for someone who is short!
Take from a 53 year old 5%u20192%u201D woman who wears a current Size 0-2 and weighs 100 lbs, you have blown up to be fat as a tick and suddenly put on over 30% of your body weight. That signals a problem %u2013 either a medical condition or one with your elbow (as in bending it too much.) Definitely a health risk with diabetes and coronary disease in the offing.
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