Complaints Lead to Fines on Insurers

The relative number of complaints remained low, but state regulators took action in several cases

July 15, 2009 -- The number of complaints against health insurance companies remained flat in 2008 despite efforts by the Department of Consumer and Business Services to spread the word. Of the 30 companies based in Oregon, only 694 complaints were filed.

 
The top three reasons: denial of claims, unnecessary delays and unsatisfactory settlements with people having to pay higher co-pays and deductibles, according to Ronald Fredrickson, who leads the consumer advocacy team. By law, complaints are kept confidential, however the numbers are published annually.
 
Regence BlueCross BlueShield led the pack, receiving 207 complaints of which 132 were justified after a review by state officials. Providence Health Plan came in second (66 complaints; 47 justified) with LifeWise Health Plan and Kaiser Permanente closely behind (63 complaints; 37 justified) and (58 complaints; 41 justified).
 
Frequently consumer complaints have led to corrective action. Take the case of Kaiser Permanente. In 2006 and again in 2007, three members were denied bariatric surgery despite their employer coverage. Following an investigation, the surgery was considered medically necessary for one patient. Kaiser was required to cover that procedure and pay a $9,000 fine.
 
A complaint against PacifiCare Life Assurance Company, which had denied six medical claims, led to an investigation by DCBS that overturned nearly 5,000 other claim denials in 2008. PacifiCare ended up with a $46,000 fine for failing to conduct reasonable investigations before denying claims, making policyholders with pre-existing conditions wait more than six months for coverage and for failing to act promptly on a claim.
 
“One person’s complaint can have an impact and change the practices of an insurance company,” said Frederickson, who spent 36 years working in the insurance industry before joining the state agency four years ago and is willing to speak to community groups about the consumer advocacy program. “Unfortunately a lot of people don’t know we’re around.”
 
Whenever his agency receives a complaint, it notifies the company, which then has 21 days to respond. Consumers are always notified of subsequent action.
 
In 2008, there were also 53 complaints filed against long-term care insurers -- Bankers Life & Casualty had the highest number (24) followed by Genworth Life Insurance with 8 complaints. The state also accepts complaints about auto, annuities, life and homeowner insurance.
 
In 2008, the Consumer Advocacy Unit helped people recover nearly $2 million in claims.
 

Take Action

Frederickson is willing to speak to community groups about the consumer advocacy program and can be reached at 503-947-7277.
 
To file an insurance complaint either call 888-877-4894 (toll free), 503-947-7984.
 
For more resources on how to file a complaint with government agencies click here.
 
A copy of the 2008 report showing the complaint records is available by going to www.insurance,oregon.gov and clicking on Publications.
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