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Who’s on First?

Richard Connor

IS IT JUST ME OR HAS dealing with health insurance companies become more confusing and frustrating? Trying to figure out who to speak to feels like that classic Abbott and Costello comedy routine, “Who’s on first?

My wife retired last July. For the previous four years, we’d used her employer-provided medical benefits and now we needed to shop for coverage. Under my old employer’s pension plan, pension-eligible employees like me—who retired prior to beginning Medicare—were eligible to sign up for one of the company’s medical plans. You paid full price, less a subsidy that depended on your years of service.

I had more than 30 years of service, so I was eligible for the maximum subsidy of $735 a month. After the subsidy, a high-deductible health plan for my wife and me cost about $900 a month. This seemed like our best option for medical insurance when we enrolled in August 2021 and renewed for 2022.

I started my pension in August 2017. In the four years since, the company I had retired from merged with a larger company, went public in an initial public offering, and then merged with another, even larger company. This final merger brought the company back into private ownership, so its stock was delisted. Needless to say, human resources (HR) and benefits providers have changed many times.

I was a senior manager for the last 20 years of my career. I always made it a point to build strong relationships with HR. It was important to know who the experts were, in case you needed support. This was especially true for employee benefits.

Over the years, more and more of the benefit functions were outsourced. Benefit plans changed frequently, especially as my old company changed hands. As far as I can ascertain, my current health insurance requires five different companies to manage the process. Figuring out who to call if you have a question is getting harder all the time. Here’s my simplistic view of the five companies involved and the roles they play:

Company No. 1 is the one I worked for and retired from. It owns the pension plan and contracts with the other four companies to provide the entire menu of health insurance services to employees and retirees.

Company No. 2 is a full-service benefits administrator. It administers the benefit plans for company No. 1. This includes health plans, retirement plans and a menu of other offerings. Company No. 2 created and manages the web portal that employees use to sign up for benefits. This website is also used for annual enrollment, as well as any changes due to life events. Company No. 2 also handles the billing and payment of premiums.

Company No. 3 is a third-party administrator that processes claims. I looked the company up—it administers benefit plans for more than 100 companies. I think it interprets the insurance company’s plans and makes determinations of what’s covered. Company No. 3 keeps track of claims, deductibles and out-of-pocket totals. I also believe it sends out the explanation-of-benefits statements.

Company No. 4 is supposed to make health care personal. It’s the company you actually speak to when you call company No. 2 or 3. It administers wellness plans and can provide limited information about your health coverage.

Company No. 5 is the actual insurer, one of the Blue Cross Blue Shield companies. It doesn’t appear to interact with the insured—me—in any way. I remember speaking directly with Blue Cross 15 years ago, advocating for my mother when she was ill and the company was denying her rehabilitation care. It was a challenge, but I kept working my way up the ladder until I spoke with a supervisor who agreed with me and got the services approved. I have no idea how, or if, I could do that now.

Last year, my doctor recommended an outpatient diagnostic procedure for me. I scheduled it for late December. The doctor prescribed two procedures at once. He presumed the results of the first would justify the second procedure based on his examination and discussions with me. Before I had the procedure done, however, the outpatient facility contacted me to say the procedure had not been approved. That came from company No. 4, which communicates with you about your insurance coverage.

The outpatient facility worked with my doctor to get a new prescription for the first procedure only. Company No. 4 approved the new request. Its response said that the procedure was medically necessary and appropriate. But it specifically stated that this approval did not imply that the procedure was covered by my insurance. That one really confused me.

Later, I received notice that it would be covered. Since we have a high-deductible plan, and my rescheduled procedure would now be early in the new year, I suspected we would pay most and perhaps all of the cost. I called the outpatient facility’s business office to get an estimate. The employee there was able to give me the amount the facility would charge the insurance company, but not what the negotiated price would be under my insurance plan.

The business office recommended that I contact my insurance company to find out what the negotiated cost would be. I called the number on my insurance card and got someone from company No. 4. The representative had trouble understanding my question. He could tell me what our family deductible was, and how much we had used to date. He recommended I call company No. 3, the one that processes claims.

I called company No. 3, using the number on its website. A representative of company No. 4 answered. She thought only company No. 5 could know the answer to my question and recommended that I call company No. 2, the benefits administrator. I’m sure you’ve guessed by now that company No. 2 had no idea of what I might be billed.

That’s when I gave up. It will be what it will be, and we will pay the bill.

Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.

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