posted on:  6/7/2006    revised: 3/10/2010

For many years I kept an informal tally of consumer complaints received about various insurance companies.  At one point I made waves and even drew attention from a Congressional subcommittee by stating that the number of complaints OnlineAdviser received about Mega Life Insurance exceeded the number of complaints of all other insurance companies combined.  The same problem companies were named year after year and by the end of 2003 I saw little need to continue keeping the tallies when the results did not seem to change.

That decision to abandon the complaint log appears to have been premature.  Complaint trends have changed dramatically over the past few years.  Although I now have no statistical data to support these observations, it seems clear that the following changes in complaints trends, when perceived by consumers, could have significant impact in the health insurance market.

1)  Golden Rule Insurance Company was frequently named in complaints in the 1990s but not a single complaint has been received since 2004.  Golden Rule has increased market share in high deductible health plans for Health Savings Accounts and in a special type of estate planning insurance designed to protect assets from the high cost of long term care coverage.

2)  Assurant Health was once considered one of the highest quality health insurance companies in the country.  At one point many of the independent insurance agents in my area chose this company for their own health insurance.  The company then seemed to enter a downward spiral with one bad management decision after another.  Consumer complaints reported to the National Association of Insurance Commissioners soared to 2 or 3 times the level for an "average" insurance company.  Complaints to OnlineAdviser also increased sharply to the point where this company now receives more complaints than any other insurance company. Assurant Health attracted national headlines in February 2010 for the largest bad faith jury award ever made against an insurance company. Yet management issues appear to be resolved and the company is again on solid footing. As long as Assurant remains a dominant market position as the low price insurance leader, these high profile consumer complaints are likely to continue.

3)  Blue Cross complaints changed in nature rather than the number of complaints.  Five years ago most consumer complaints focused on claim processing issues.  Now the claim complaints appear to have disappeared, and virtually all complaints now focus on solely on eligibility or pricing problems.

4) Mega Life has not been mentioned in a complaint to OnlineAdviser in many months.  It is not clear if that is due to a change in the products or a change in products offered by the sponsoring business associations.

In summary, Golden Rule is in, Assurant Health is working out its problems, and Blue Cross is now perceived as an elitist health care provider.  I suspect that these trends would also be reflected by the National Association of Insurance Commissioners' official publications and that may be the topic of a future article.

keywords:   complaints about health insurance

related topics:

Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved.