Heart of darkness: Inside the paperwork jungle of health insurance

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Tom Foreman | Bio
AC360° Correspondent

When Carol “Yogi” Yogan goes to her mailbox every day, she must be tempted to take a machete; that’s how frustrated she has grown hacking her way through the insurance industry’s paperwork jungle.

Sitting at her kitchen table, confronting an overflowing pile of letters and forms from insurance companies, she admits what many other consumers readily say: She has a very hard time making sense of what they all say. However, she knows that several times she’s had to engage in repeated phone calls and messages with insurers to get payment on legitimate claims. And that makes her suspicious that the paperwork jungle is hiding something. “There’s a reason for this,” she says. “It’s called money. Other people’s money.”

She may be on to something. Some doctors too have accused insurance companies of boosting their profits through a claims process that is unnecessarily difficult. Not far from where Yogi lives, Dr. Val Jones joined a small practice where the doctors do not even take insurance. They charge a simple, relatively low fee for each service, and that’s it. Why? In part because the doctors grew tired of seeing patients struggle with baffling insurance paperwork while both their health and wealth were on the line.

“They don’t know why they’re getting these questions asked,” Dr. Jones says, “they don’t know what the forms mean. And…their compensation is dependent on it.”

Dr. Jones does not believe the insurance industry set out to cultivate the paperwork jungle, it just grew over time. But now that it is there, she suspects they are making so much money off of it, that there is no real incentive to clear it up. And Wendell Potter agrees. He is a former insurance industry executive who readily says one way insurers make money is by allowing confusion to reign. “And people often just give up,” he says, “and don’t pursue payment when a claim has been denied or been paid inappropriately or not adequately. And the same it true with doctors and hospitals.” He believes billions of dollars are at stake.

The insurance industry, while acknowledging the existence of the paperwork jungle, denies it is a trap for extra profits. Robert Zirkilbach is with a national trade association for insurers called America’s Health Insurance Plans. He says, “The health insurance industry is one of the most regulated industries in America, and particularly at the state level there are all kinds of requirements of information that needs to be provided to patients in paper and through the mail.” But he adds, insurers are just as worried as customers about that confusion that causes. “We agree that reform is needed. In fact, that’s why we’ve been working very hard to develop reforms to make the system more efficient."

The former insurance executive, Potter, does not buy it. “They are not being accurate. They’re not being truthful. They’ve not made it a priority.”

Back in the paperwork jungle, Yogi Yogan has pretty much lost all faith in insurance companies. She has enough insurance to cover a catastrophic illness, but for routine care she’s now going to that fee-for-service medical office where Dr. Jones works.

“It’s seamless.” She knows precisely what she is getting and what it costs. And best of all, she adds, it’s outside of the paperwork jungle.