What You Don't Know about Health Insurers

So you've studied your health insurance policy front and back - you know all about deductibles, exclusions, and co-payments, but there's probably a lot more you don't know about your provider. That's because insurers have more than just a few secrets. There's plenty of information they aren't exactly open about with the public and yes, some of it could affect you. From their earnings to where your premiums go, your insurer is probably keeping something from you. Here's a look at several industry secrets you probably never heard about.

Health Insurer Secrets

• Your provider may give financial incentives to doctors that give you treatment based under the company's "best practices." Best practices are generally meant to reduce your chances of chronic conditions and ultimately reduce costs, but it might not always be the best form of treatment for you.
• In the majority of states, you cannot sue your provider in civil court to hold it responsible for treatment decisions. You can only sue in these 17 states: Arizona, California, Georgia, Illinois, Maine, Minnesota, Missouri, New Hampshire, New Jersey, North Carolina, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Washington and West Virginia.
• According to recent data, providers earn over $700 billion a year, but only have a 3% profit margin. That's because the majority of money you put into a policy actually does go toward medical services, prescription drugs, and hospital costs.
• A good portion of the money you spend on coverage is being put toward unnecessary medical tests or procedures. With so many people looking to cash in on any mistake doctor's make, more doctors are starting to feel the need to be overly cautious with patients so they aren't found liable for something later.
• If you have any type of problem with your carrier or their practices, you can take your complaint to an external review board in most states. The only states without an external grieving practice are Idaho, Mississippi, Nebraska, North Dakota, South Dakota and Wyoming.
• Some carriers can legally take part of your injury settlement from a car accident to recoup the costs of your medical care. This practice is known as subrogation and must be included in your original policy agreement.

Additional Resources

• Money 101 Lesson 16: Health Insurance
• 10 Insurance Myths You need to Know