California: Life in the Corporate State

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GELFAND’S WORLD--How is the Affordable Care Act doing here in California? One recent newcomer to the system informs us that the state agency known as Covered California is doing just fine. It's only when you have to deal with the insurance company itself that things can get sticky. Perhaps sticky is too polite a word for it. Here is her story. 

The subject of our account spent a little more than a year working in another state. When she came back to California, it was coincidentally at a time that was the beginning of the open enrollment period. She called Covered California and was presented with a list of options. She chose to sign up with Healthnet. She dutifully made her first payment well in advance for a December 1 start date. All was fine, or so she thought. 

But all was not fine. For reasons known only to the insurance deities, Healthnet fumbled this particular ball. Instead of signing her up for the first of December as promised, she was signed up for January of 2016. This would have left her without health insurance for all of December. She discovered this mistake well before the first of December (and well after her payment cleared). Thus began the long and difficult process of trying to resolve the problem. 

Let me give you a hint. Healthnet never got the problem solved. 

Healthnet made lots of promises, but never actually got anything fixed. In looking over her notes, our customer found that she had talked to at least 17 people on at least 2 continents. Pretty much everybody she talked to said that her problem was fixable, but could not be fixed right then. The first several conversations, she was told that it would take 5 to 7 days, and then the mistake would be rectified. 

Several of those 5 to 7 day intervals ensued, but Healthnet never got her signed on for the December 1 start date. It was always listed as pending, or the fully paid premium was somehow still due. 

Here is what she discovered. The company mistakenly took the original payment for the 2015 coverage and applied it to coverage under a different account number that would only have started after the New Year. In further conversations with additional Healthnet representatives and eventually with Covered California, she found out that Healthnet was suffering from an administrative glitch that probably has affected a substantial number of would-be customers. She apparently was not the only person to have her insurance payment credited to the wrong month and the wrong account number. 

Each time she talked to Covered California, she got prompt and courteous service. Each time, she was told by staff that something about her application was still pending. Additional conversations with Healthnet representatives led to promises, including the assertion that her insurance card was in the mail. 

Yep, it was in the mail, as the old joke has it. It was in the mail in the same way that your check from the Euro Lottery scam is in the mail. 

Early in January, she received a card from a Healthnet return address with some kind of discount offer for a drugstore chain. But still no insurance card. 

When it got to be the year 2016, our intrepid consumer called Covered California one more time, and asked them to get her out of Healthnet and into a different company. By then, she had become assertive enough to ask that the change be accomplished that same day. Covered California had to do a supervisory override on some administrative rule, but they accomplished the requested task in that one phone call. 

In summary, the state of California has kept its pledge. Its service organization Covered California picks up the phone when you call, and real live people talk to you. They even do what they can to help. 

Here is a curious question: What advantage accrues to Healthnet in providing such lousy service? We might consider the answer, if there is one, by considering the possibilities. 

The first is the simplest. Maybe Healthnet is just being cheap. Maybe it's just saving a few bucks on customer service. It outsources as much as it can to overseas contractors, and only provides domestic representatives when customers get demanding. There are two effects stemming from this policy. The first is that the first representative the customer deals with can't just walk down the hall and talk to a higher ranking administrator. The representative is half a world away, and can only follow what is essentially a narrowly tailored script. 

The other problem is this: The first level representative does not have the tools or the authority to actually fix the problem. All he can do is pass the buck. Presumably that representative is just  typing the complaint into a computer and pushing the send key. Somebody who is somewhere else will have to solve the problem. 

That's presumably why the promises always involve that 5 to 7 day wait. It's not really a good faith promis. It's just a rote reply to each frustrated customer. 

The other advantage for the insurance company is that the customer doesn't actually get to make use of services during the waiting period. Prescriptions don't get covered, and doctor's appointments won't get made -- not unless the customer is willing to risk having to pay in cash at the front desk. 

It's not obvious which of these reasons is the true one. Maybe it's something else entirely. Maybe Healthnet was saving money on its computer support staff and has been suffering from some giant computer glitch. That could also explain this fiasco. Only if that were the case, wouldn't it be helpful for the company to explain the problem to its anxious customers? That would have been the obvious approach. 

The other possible explanation is that Healthnet is being difficult to new customers coming into the individual (rather than group) health insurance market. That gives Healthnet a slight advantage in ridding itself of people who are a little more statistically likely to have some preexisting condition. 

In any case, the company still has the money they received from this customer. It's money that was paid for coverage that was never actually received. 

Why aren't I surprised?

 

(Bob Gelfand writes on culture and politics for City Watch. He can be reached at [email protected]) 

-cw

 

 

CityWatch

Vol 14 Issue 3

Pub: Jan 8, 2016