Wednesday, July 07, 2010

Insurer revoked leukemia patient’s coverage because it claimed she underpaid her premium by a penny.


One of the worst abuses of the private health insurance industry is the practice of denying claims to pay for necessary care or revoking the coverage of policyholders for frivolous reasons. The Colorado Springs Gazette reports that a leukemia patient — a single mother of two teenage boys — had her coverage revoked after her penny-pinching insurance company, Discover Benefits, claimed that she had underpaid her premium:

La Rosa Carrington has more than enough to worry about. She’s a single mother with two teenage daughters, she’s fighting a type of leukemia that requires five days of chemo a month for four months, and she lost her job in May. So the last thing she needed was news that her health insurance benefits would be terminated because she hadn’t paid her premium in full. The shortfall? One penny. [...]

Under the 2009 American Recovery and Reinvestment Act, those who meet the eligibility requirements pay just 35 percent of the full COBRA premium. Because Carrington had not yet received a bill showing what her payment would be with the discount, she whipped out a calculator, figured out that she owed $165.15 a month and sent a check for that amount to Discovery Benefits.

But Discovery Benefits determined she owed $165.16, and last week, she received a letter from the company telling her she was short on her premium and her coverage could not be continued. The letter, however, did not tell her how much she owed. She called Discovery Benefits and was aghast when she heard the amount. “I said, ‘Are you kidding?’ How am I going to pay you a penny’”?

After Carrington threatened to go the media, Discover Benefits reviewed their records and determined that she had, in fact, paid the correct dollar amount for her premiums, and decided to reinstate her coverage. June Harryman, a supervisory benefits adviser for the federal Employee Benefits Security Administration regional office in Kansas City, told the paper that the practice of companies revoking coverage after customers allegedly underpaid their premiums by a penny is not uncommon. “We’ve seen it before,” she said. “It’s not the first, and it won’t be the last.”

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