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health insurance research

Health insurance complaint trends

OnlineAdviser service reports sharp change in trends since passage of federal health reform.

by Tony Novak, CPA, MBA, MT, NAHU certified consumer driven health care consultant, originally published 1/24/2012 and updated 10/18/2012

When I first started handing online consumer inquiries about health insurance in the 1990s, most of the complaints focused on the inability to obtain insurance. The majority of callers (and email inquiries) seemed to be willing and able to purchase insurance if only they could find it. Now, more than 15 years and 50,000 inquiries later, the concerns are much different. While there is no evidence that consumers are better or worse off or that their understanding of insurance issues has changed much over this time, the fundamental nature of complaints has certainly changed.

These comments do not reflect responses to any specific insurance companies but widely represent dozens or perhaps even hundreds of plans nationwide. Prior to 1993 we actually noted and tallied consumer comments about specifically named insurance companies for he purpose of making others aware of the trends. We stopped this when the same offenders appeared year after year and threatened to sue us for harassment. Now we note only the nature of the comment or complaint.

Today's insurance consumers find adequate insurance choices and help available to obtain information about their choices. The chief complaints in the latter part of 2011 were:

1. Out-of-pocket expenses are too high therefore insurance is "worthless" to them; especially for maternity expenses
2. Items their insurance policy doesn't cover but should (weight loss procedures, outpatient mental health, prescriptions, etc.)
3. Insurance coverage should be free of charge; this belief seems to be widely held in certain states like California and Massachusetts

We've also noticed a few interesting and sometimes disturbing trends in health insurance complaints:
Consumers who are being treated for depression are more likely to be dissatisfied with their insurance plan regardless of the type of carrier (probably no surprise here).
It is more difficult to reach a live person in member services than the independent insurance exchange. The perception is that it's easy to buy, difficult to get service. As a result, the exchanges are flooded with calls from plan members and health care providers who are unable to reach a live representative for member service.
Consumers seem to believe that a lower-priced policy provides better value than the higher priced policy. (Evidence shows the opposite to be true).
As health insurance companies deliberately make it more difficult for consumers to cancel coverage on short notice based on emotion or short term cash shortages, consumers are increasingly annoyed that they cannot cancel via voicemail or email.

By the third quarter of 2012, it become clear that the majority of consumer health insurance complaints reported to us were coming from people who did not carry major medical insurance but were trying to make a less expensive mini-med policy do the work instead. This is an inherently risky position that will inevitably generate problems. Also, we are concerned about the rising number of complaints stemming from policies soled over the phone by sales representatives in call centers. In our experience, these large sales operations do not provide a level of professionalism that would lead to consumer satisfaction. Purchasers sometimes claim that the benefits were misstated and there is no way to investigate the problem. Freedom Benefits supports a complete ban of telephone insurance sales.

Tony Novak, authorAbout the author - This Web page and related content is written and periodically updated by consumer finance writer Tony Novak. Comments, questions, feedback and updates are welcome to help keep content relevant and up-to-date. Contact the author directly by e-mail, on Twitter or through the contact information included on his Web site.

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This web site is independently owned and managed by Tony Novak operating under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator". Opinions expressed are the sole responsibility of the author and do not represent the opinion of any other person, company or entity mentioned. Tony Novak is not an agent, broker, producer or navigator for any federal or state health insurance exchange but may provide uncompensated advice, reviews and referrals to these official resources. Novak is compensated as an accountant, adviser, affiliate consultant, marketer, reviewer, endorser, producer, lead generator or referrer to some of the other commercial companies listed on this site. Information is from sources believed to be reliable but cannot be guaranteed.