The insurance industry has flourished in the world. Almost everyone in the Unites States of America has health insurance. It covers costs for medicines, surgeries, dental expenses, and much more.
How Insurance Companies Work
Health insurance companies run on risk and they will do everything in their power to make sure that the risk is in their favor. But just saying that the scam is because of them is false. There are some biased decisions in analyzing this scenario. If we analyze it from the perspective of health care providers, the insurance companies deliberately make policies that lead to higher prices, and as a result, they charge more than they should. Health care providers say that insurance is a scam because health insurance companies charge more so that they can profit from it.
However, the health insurance companies have a completely different perspective for this debate. They deny that insurance is a scam. Moreover, they also say that it is not in their jurisdiction to apply higher rates for benefit. The reason they gave for this is that the medical facilities provided by the health care companies are very expensive, so they have to charges higher than their customers, to save themselves from any losses. Moreover, health insurance companies say that they try their best to help their customers by lowering down insurance rates by using strategies such as network agreements.
Scams committed by health care providers:
Let us prove this by analyzing the health care bill from the United States of America. Suppose you are about to have medical treatment at a hospital, or maybe you have to buy yourself some medicines. The health care provider sends you a bill of three thousand dollars for the whole procedure, but when you contact your health insurance company, they say that you only have to pay five hundred dollars to the health care company.
The health care provider agrees to this, and so you are charged 500 dollars. It is only possible if you come under any health insurance policy.
You must be thinking that it is very odd for the health care provider to agree on 500 dollars even though the total bill was three thousand dollars. It proves that it depends on the patient, and he is the driving force that determines how many payments he shall receive for the treatment. This example proves that health care providers are the culprits and not the health insurance companies.
Another example of this is that when you go to a fancy restaurant with your family, it is not like you eat and then they provide you with the bill. The menu is provided to the customers first so that they can order the food of their choice and look at the budget so that they may not order the food which they cannot afford that time. In the United States of America, this is not the case. The organizations that provide health care facilities usually hide the prices on purpose. Moreover, the health care organizations that provide health care facilities can resort to scams. You might be treated by a doctor who does not come inside the range of your health insurance policy, and as a result, you will have to pay more. So if there is a scam, there are higher chances that the health care provider has committed it.
Moreover, there might be some surgeries at the hospital that you must undergo, and their costs are not included in the health insurance policy. The health care providers should educate you on this fact, but they do not do it. It is because they are worried you will try to reduce costs by contacting the health insurance company. Sometimes, the hospitals may charge you for the facilities that they did not even provide you.
Is The Us Health Insurance System A Scam?
So, what is the purpose of health insurance companies? Insurance will cover the costs that are due to events that are not predicted and unexpected. They are a source of instant payments for customers who are unable to arrange a load of money at that time. The insurance companies run by risk, and their sole purpose is to cover rare even, so as a result, these events are not common. The responsibility of paying for these risks is taken by the insurance companies and in return, the customers pay the insurance companies monthly payments called premiums. Only a few of those people receive unexpected payments and so they are paid by the insurance company.
However, the health insurance companies do not function the same way as described above. Almost all health insurance companies have shifted their policies from even based to yearly based. It means that they will charge an amount that depends on several factors. These factors include annual checkups, surgeries, medical bills, lab tests, or visits to the physician. Moreover, they also provide the options of partial premiums or total premiums. If you have partial premium payment, they will pay for a percentage of those costs that are made by you.
Let me clarify, the health insurance I provided in the United States of America is not a scam. There might be some people who are running insurance companies for scams, but the sole purpose of the health insurance system is to provide the people of America with assistance and not to rob them of their money.
Health insurance is not the current business idea, but it has been practice in the United States for over 110 years now. Sometimes people do not accept businesses that are legal and for the benefit of the people. These people then declare insurance companies as scams and try to ruin their image.
The biggest complaint by the people who say health insurance is a scam is that they say that the insurance companies rob the people of their money unnecessarily and do not pay them their deserving amount when they face unexpected events. Some of these people say that these companies do provide payments for medical expenses, but the only fault is that they invest that money in other areas to gain profit from it.
These people do not understand the basic concept of insurance companies. The insurance company must provide the people with instant cash and so that they can help them. People have no right to criticize the insurance companies and call them a scam when they invest monthly premiums in other businesses to earn themselves a premium. Just to call them a scam, for this reason, is unfair. You should avail your facilities from the companies and go on with your problems. Moreover, this is a personal business strategy of these insurance companies. It is their business model and their means of income so that the insurance company can survive.
Moreover, these people do not understand that it is the right of an insurance company to gain profit for them. If we just that health insurance companies are a scam just because of the reason that they gain profit, this is wrong. Moreover, they do not have to just provide services to their people. They have other costs to take care of. They have offices to run, electricity bills to pay, taxes to pay, and last but not least, they also have to pay for the salaries of their staff members.
Throughout the years, it has been statistically proven that the only major cost involved in running an insurance company is the administration cost. The administrative costs are so much that insurance companies have to make policies so that they can enforce the health care providers to pay some portion of the administrative costs.
The administration is not just restricted to the handling of people. It involves other things also. I will explain this using an example that has been followed in the past. Medical part D is a drug and the authorities had to wait for almost 40 years to bring it under the jurisdiction of health insurance companies. So, when it came under the jurisdiction, the insurance companies had to take huge phone books and inform all the insurers about this policy by contacting everyone personally. When the law is changed, the health insurance companies have to carry out dozens of pressures and changes in their policies.
These alterations in policies are both time-consuming and cost a lot of money. The profits and benefits to the customers are reviewed every year. Moreover, if you need to bring any changes to it, you have to further spend money as customers do not come to offices to collect brochures of policy changes. The insurance company is responsible to deliver any documents to the customers on time and with safety as it contains sensitive information. Keeping these costs in mind, we cannot say that health insurance companies are a scam by taking loads of premiums from their customers and just benefiting themselves and only paying out when an accident occurs, which is also very rare.
Moreover, there are other costs also related to health insurance companies. Health insurance companies also have bids that are conducted each year. Almost every insurance company takes part in those bids, and this bid is effective for only one year, this means that they have to bid again in April. Moreover, the health insurance companies provide low-income subsidies to people who cannot afford to pay expensive premiums every month. These people are also given compensation to include them in the Medicare part D program. For all these costs, the insurance companies have to pay from their own pockets, so it is fair if they increase the premiums each year.
Furthermore, there are other duties applied by these insurance companies, and those duties and procedures have to be followed by all the people linked to that insurance company. The insurance companies have to administer hundreds of rules and bring about many changes in the policies. In addition to this, they have to keep their customers updated with every policy change. This communication with customers itself costs a lot of money.
The more changes in the law and policies, the more the computer systems have to be updated. Most of the time, the data is in such a huge quantity, that the computers are unable to sustain the pressure, and hence it leads to malfunctions. As a result, the insurance companies have to spend money to buy newer and powerful computers.
As a result, we can conclude that health insurance companies are not a scam, and they only increase the premiums when there are extra costs the company has to pay for. Moreover, if we look at it logically, people don’t bring out such protests when they have to pay for a bottle of shampoo that is made using 30 cents and costs 5 dollars. These people do not hesitate to pay 5 to 6 dollars for a coffee, that has only 30 percent coffee, and the rest is justice.
Possible insurance scams committed by some fraudulent companies:
Although we say that health insurance companies are not fraud, there still are some insurance companies that can commit fraud so you should be aware of those frauds and take necessary steps to protect yourself from those frauds.
In case of emergency, people are in a state of confusion, fear, and frustration.
Some health insurance companies take advantage of the situation of people and commit fraud with them. in those emergencies, people do not think about the different factors by which the insurance companies can commit fraud. People do not think about the actual distance covered by the ambulance or the number of services used while taking the patient to the hospital. So what these people do, they charge them extra and tells them the wrong distance covered by the ambulance. Moreover, they also lie about the services provided to the patient. The addition of these small charges leads to millions of dollars in profit.
Mental health fraud:
Mental health fraud is also very common, and it contributes to millions of dollars in fraudulent charges. It consists of a lot of fraud, and the health care providers charge the customer extra for the services provided to them. I will explain this using an example. Suppose a patient requires the need of a therapy session. The health care providers will charge the patients or the insurance companies with an amount for one whole session that was 1 hour long. In reality, the health care providers were only provided with a therapy session that was just 15 minutes long. Most patients are also charged for completely unnecessary services. For example, the therapist just makes the patient watch a movie relief to his health. They could have simply given him the movie, and he would have watched it at home. Most of the time patients with mental health issues are under such a burden and stress that they agree to everything the doctor tells them. So you should be very careful and analyze the treatments.
Medical ID theft:
It is a criminal activity that is carried out by some health insurance companies. In medical ID scams, the health insurance companies copy sensitive data about you into their computers. This information is used to charge you with extra charges, and they may also achieve health benefits using your information. They steal info such as social security number, phone number, and id card number. Moreover, they also sell your information to the scammer. You must have experienced several scam calls for advertisements. It is how they get your information.
Equipment charges fraud:
Health insurance companies commit equipment frauds by altering the medical equipment claims and charging their customers more than they deserve. This fraud is mostly committed with the elderly or people who are disabled. The insurance company may double the bill deliberately. Moreover, it is also common that they more medical supplies than the quantify recommended by the doctors.
Therefore, you should be very careful in dealing with insurance companies, and you should investigate the company before signing a deal with them.