Protecting and Preserving Health Benefits for NY State Residents

There’s one law that no one in Albany can change, and that’s the law of unintended consequences.

 

Few episodes in recent history better illustrate that reality than a 2009 crackdown on HMOs by then-Attorney General Andrew Cuomo.

 

Cuomo set out to rectify a very real and serious breakdown in America’s health care system — consumers getting blindsided by exorbitant bills when they go outside their health plan’s network.

 

Responding to thousands of complaints, he announced a settlement with insurance companies that was supposed to keep everyone honest and save consumers big bucks.

 

“This agreement will keep hundreds of millions of dollars in the pockets of over 100 million Americans,” Cuomo declared at the time.

 

More than two years later, however, consumers are getting socked harder than ever.

 

Cuomo’s well-intentioned solution not only fell short of truly fixing the problem, but arguably allowed things to get worse.

That much was obvious not just from Greg B. Smith’s investigative reporting in the Daily News this winter, but also from a report last month by the state Financial Services Department.

 

“Our investigation shows that too many people are being hit with medical bills that are too high when they thought their care was covered by their insurance,” now-Gov. Cuomo said in issuing the report.

 

What went wrong? Cuomo and his team underestimated the conflicting economic forces at work — with health care providers demanding as much money as they can get, and insurance plans striving to pay them as little as possible.

 

The little guys suffer the consequences of this warfare when they use a doctor or hospital that’s not part of their health plan’s network.

At the time of Cuomo’s settlement, plans typically promised to pay 80% of the “usual and customary” fees for out-of-network care.

 

But what counted as “usual and customary” was in the eye of the beholder — and the beholder was Ingenix, a company owned and operated by UnitedHealthcare, one of the nation’s largest insurers.

 

Ingenix naturally came up with lowball estimates of what the “usual” fee would be, and the health plans paid 80% of that — sticking customers with the balance, often in the thousands of dollars.

 

Cuomo’s reasonable-sounding solution was to replace Ingenix with an unbiased nonprofit organization, FAIR Health, which would establish standard fees based on averages of what providers actually charge.

 

Read Article on NY Daily News