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
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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. |