Close encounters of the first kind

THE AMERICAN science fiction film Close Encounters of the Third Kind was written and directed by Steven Spielberg in 1977. It tells the story of a blue-collar worker whose life changes after an encounter with an unidentified flying object, or UFO.

The ‘third kind’ denotes human observations of aliens or living beings. I will alter the title of this film classic as a symbol to describe my dealings with one part of the local health-insurance system.

‘First kind’ in the headline is meant to indicate that the contents of this article describe my encounter with the private health-insurance system and represent my opinions.

They are not those of the third parties.

I am airing my experience via this medium to try to influence policymakers, the insurance regulator, insurers, intermediaries, policyholders, claimants, medical and other professionals, attorneys, professional bodies, and other stakeholders in the insurance service-delivery system. They are actors in the claim settlement supply chain.

In last week’s column – Claims Delay Blame Game – it was argued that reforms to the system for handling motor claims are overdue. Likewise, the status quo does not serve the best interests of the average health-insurance consumer.

My wife was diagnosed with a serious medical condition last Monday. It was not related to COVID-19. Our family doctor, other medical service providers, and other professionals played important roles in helping us to navigate this unexpected crisis during very troubling times. Members of this group, in my opinion, represent the best of their profession – the elite 0.1 per cent. Experiences are often remembered as good, bad, in between, or a combination of all three. Members of our group fell into the first category.

Our dealings with the insurance segment, with two notable exceptions, were tainted by ignorance, a lack of professionalism, and the inability to analyse information and to make proper decisions. It was my impression that the service provider was programmed to reject claims by default.

Although the insurer eventually agreed to pay the six-figure claim, the experience left a bad taste, caused sleepless nights, and helped to create stress – things the insurers should know are harmful to one’s health.

How would someone from rural Jamaica, during a period where he or she was feeling helpless, did not have my industry knowledge and experience, and could not read and understand his insurance contract, fare under a similar set of circumstances? Is the system treating all claimants fairly?

The insurance regulator, the Financial Services Commission, introduced market-conduct guidelines for insurers in June 2014. They were revised in February 2019. Last Sunday’s article showed that at least one non-life insurer was not obeying the rules. This week’s provides proof, based on my experience, that one life/health insurer is not playing by those same guidelines.

Market conduct refers to “all strategies, policies, activities, systems, practices, and measures that are executed or performed by insurance companies … in the ordinary course of business, prior to parties entering a contractual

arrangement and until all obligations under the contract have been satisfied, to ensure that all customers are treated fairly”. Strategies, policies, activities, systems, practices, and measures include the management of claims.

The FSC’s rules make the false assumption that the claims process in life and nonlife insurers is similar. Could this be one reason that both segments of the industry are ignoring them?

These are six obstacles that the average consumer encounters:

• A process that lacks transparency;

• The absence of information about how to appeal lower-level decisions;

• A lack of information about how to make complaints;

• The inability to understand medical terms and to read and understand medical terms;

• The propensity of some physicians to speak a foreign tongue that only other doctors understand; and

• A failure on the part of insurers to use plain English in their contracts.

Our claim was rejected because of an employee’s failure to properly interpret a standard policy provision about pre-existing conditions, read and interpret medical reports, and conduct basic research. The claim official showed a lack of empathy and was oblivious to the stress that she caused. No apology was offered for the blunder.

The United States’ Affordable Care Act banished the pre-existing conditions exclusion from health-insurance policies. Why, almost 10 years after its introduction, are local insurers still including this exclusion in their policies?

It is my hope that my encounter with the health-insurance system will catalyse efforts to make it operate more fairly and transparently to all consumers.

■ Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com