Andrew White joined the Marine Corps Reserve in July 2003, and served as a combat engineer, disarming “improvised explosive devices” and patrolling areas near Iraq’s border with Syria.  Shortly after returning home from duty in September 2005, his older brother Bob, who was serving in the Army in Afghanistan, was killed when a rocket-propelled grenade hit the Humvee in which he was riding.

After the tragic death of his brother, Andrew decided to take out a $50,000 life insurance policy from AIG, with his parents as the sole beneficiaries.  He wanted to avoid any financial burden for his parents if anything were to happen to him.  After filling out the application, he was then examined by a health professional of AIG’s choosing on Oct. 31, 2006.  AIG then issued the policy the following month and requested him to pay a higher premium because he was a smoker, which he agreed to.  For fourteen and a half months he made his monthly payments.

Then in August 2007, Andrew was diagnosed with post-traumatic stress disorder and began treatment and medication that he took responsibly.  Andrew sadly died in his sleep not long after being diagnosed.  His toxicology screen said he had normal levels of his medication therefore ruling his death as accidental.  However, when his parents submitted his death certificate to AIG, the insurer denied their claim.

AIG said, “that had they known that Andrew White had a car accident when he was 16 years old, they never would have written the policy to begin with.”

Jack Tinney, who represents the White family says, “[t]hat’s ludicrous.  They have gone back and searched for any reason whatsoever to deny the claim, rather than look for a valid reason.”  The lawsuit is seeking $50,000, which represents the full proceeds of the policy, plus unspecified compensatory and punitive damages.

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When a claim is denied, here are your options according to the New York State Department of Insurance suggests:

1. You must read and understand your policy. The policy is a legal contract so you must understand your rights and responsibilities.  If anything is unclear get clarification form your insurance agent or company.  Also, failure to obtain prior authorization will most likely result in a denied claim by the insurer.
2. What to do is a claim is denied during treatment. First contact your insurance company immediately.  Keep notes of all conversation; including name of whom you’re speaking with, date, and time.  You must listen carefully and make note of the answers you get.  In addition check your policy or certificate of coverage to determine your appeal or grievance rights.  Make note of any and all time frames and be careful not to exceed those times limits.
3. Be persistent. Sometimes a simple error may have caused a denial.  A billing error or incorrect code may have been entered, which can be resolved rather quickly.  After your first conversation with the company and your claim is refused, be persistent.  Insurers and HMOs are required by law to provide a written explanation of benefits and the reasons for the denial.  Also a telephone number and address is provided so you can get in contact and get information on how to form an appeal.  But don’t wait.  There are deadlines of when an appeal has to be filed so do it as soon as possible upon learning you were denied.
4. What to do if an insurer continues to deny a claim. Usually you begin by sending a letter to company asking them to reconsider your claim. Also you should provide specific reasons why you believe the claim should be paid.  You should try and be as detailed as possible in explaining why your procedure or medication in needed.  Then make arrangements for your medical records to be sent to the insurer to help support your position.  Be sure to keep a copy of everything for your records.  The insurer will then respond indicating the next steps in the process.
5. Know your rights. If a health insurer denies or limits medical service because it is considered experimental, investigational or not medically necessary, then you have the right to appeal the decision.  Request the insurer conduct and internal appeal to reconsider its decision.  If you disagree with the result then contact the Insurance Department and request an external appeal conducted by medical professionals not affiliated with the insurer.  You must request an external appeal within 45 days of the insurer’s decision on the internal appeal.

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Barbara’s insurance company ultimately denied her coverage of the drug and, instead, offered her coverage for a $50 drug that would assist her in death. Oregon Health Plan decides whether or not to provide coverage for a case like this based on a minimum 5% survival rate after five years.  Considering Barbara did not qualify and the drug she was requesting would extend her life expectancy indefinitely by six months with a very high chance of longer, the company denied her and instead offered her the option of a faster death.

In another instance, Randy Stroup 53, who suffers from terminal prostate cancer, recently learned that his doctor’s request for the drug mitoxantrone had been rejected.  The treatment, although would not completely cure him, would decrease his pain and extend his life by roughly six months.  Randy says, “[w]hat is six months of life worth?  To me it’s worth a lot.  This is my life they’re playing with.”  It is alarming when insurance companies are deciding on treatments as opposed to the patient’s physician. When a policyholder pays their whole life for coverage, they should receive the necessary treatment when they need it the most.

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Insurance company’s biggest interest is collecting premiums rather than paying claims.  The report put out by AAJ states, “the U.S. insurance companies annually collect over $1 trillion in premiums, and today the industry is sitting atop $3.8 trillion in assets.”  The industry undoubtedly is doing very well, yet their customers are suffering.  These companies operate on the basis of contracts with their customers and they ought to live up to those contracts.  The following are the three worst companies according to the list produced by AAJ:

The top offender on the AAJ list is Allstate, whose “3 D” strategy is deny, delay, and defend.  They seem to litigate every claim including ones filed by their policyholders.  In doing this, they hope it will wear out the opponents and get them to accept a minimal payment or force them to drop the claim altogether.  The policyholders who paid them a premium are left with no coverage.  In fact, a former Allstate adjuster said, “they were rewarded for keeping claims payments low, even if they had to deceive their policy holders. So much for being in ‘good hands!”

The second worst on the AAJ list in Unum, who is one of the nation’s leading disability insurance carriers, yet has a poor reputation when it comes to their policyholders.  In one instance, Debra Potter, who spent years selling Unum disability policies, was denied her disability claim that was filed due to her multiple sclerosis.  Even though her doctor backed up the legitimacy of the claim and the Social Security Administration concluded she was completely disabled, the company still denied her claim repeatedly for three years.

Third on the list is AIG, the nation’s largest carrier with assets valued at over a trillion dollars.  They have a reputation for being stingy in paying out claims, and according to AAJ, former AIG claims supervisors have said, “the company used all manner of tricks to deny or delay claims, including locking checks in a safe until the claimant complains, delaying payment for attorneys’ fees until they were a year old… and routinely fighting claimants for years in court over mundane claims.”  The company has even gone as far as using price-gouging strategies developed to cash in on the tragedies like Hurricane Katrina and the September 11 attacks.

Companies such as the ones mentioned above have been known to take advantage of their policyholders. Therefore, it is important for individuals to do their research and take their time in order to choose a reliable and dependable insurance company.

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In March 2000, Allstate’s client, Wayne Davis, drove across the center of a Camden County highway and crashed head on into the car of Edward and Virginia Johnson. Though the Johnson’s suffered serious injuries that required extensive hospital treatment, Allstate claimed that, “there was some doubt whether the Johnson’s injuries were caused by the crash.”

Then an unexpected twist happened. The couple agreed not to collect any of the $5 million dollar judgment from Wayne Davis and, instead, they teamed up with him and went after Allstate.  They jointly sued Allstate for “bad faith, refusal to settle a claim and for equitable garnishment.”  In 2006, a jury found Allstate had acted in bad faith and awarded compensatory damages plus interest. .

Allstate appealed it claiming they “did not make a submissible case.”  However, on July 29^th a three-judge panel of Missouri Court of Appeals affirmed the lower court’s judgment, holding Allstate to the settlement of around $16 million.

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This leaves homeowners in a difficult position and leaves them wondering why they are being abandoned so suddenly after being a policyholder for years.  State Farm claims the hurricane risk in Florida is too great for them to cover unless they increase premiums. State Farm stated, “[r]ates will need to rise, and/or risk will need to further decrease.” These changes are leaving people without coverage in a state so prone to devastating weather conditions.

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She says, “[y]ou assume that when you have a medical plan, it’ll be taken care of.  It’s not a mandated thing. [Autism] is in the Diagnostic Statistical Manual as mental illness.”  This means that autism and all other developmental disabilities are not usually covered by medical insurance plans.  Families with children suffering from autism spend thousands of dollars a year for necessary treatments such as; speech therapy, occupational therapy, and applies behavioral analysis for the child.

One couple, the Davis’s, have a five year old-son Alex who has autism and they say, “[i]t’s a big financial burden.  It’s s a lot of out-of-pocket expense.”  Totaling about $50,000 s year of which the insurance company pays none of.

This is the main reason why parents all over the region are supporting for the passing of Virgina House Bill 93, which would require health insurers in the state to provided state health insurance with individuals suffering other developmental delays.

On July 28^th they will be holding an Autism Summit at 6 p.m. at the Potomas Club in Landsdowne.  The summit will aim to rally local parents, therapists, and community activists to spread the word about supporting the insurance bill.

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When he finally checked out and returned home he was bombarded with medical bills that his insurance company claimed they would not cover. He was denied and now faced a medical bill of $75,000. His wife suffers from Alzheimer’s and his son with children of his own was also unable to help. He was not only dealing with medical problems, but now he has to deal with the stress of insurance companies.

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