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Irony of Health Insurers' 'Discounts'

October 15, 1995

Your article "Patients Often Pay More of Medical Bills Than Realized" (Aug. 24) is no surprise. Most consumers who felt they have been duped by an insurance company cannot possibly fight against the tremendous bureaucracy and "stonewalling" without expending large amounts of time, money and aggravation. Most working people just don't have the time.

There is some irony in the insurance industry conduct of negotiating discounts with medical providers. For example, let's say a patient has an 80-20 plan and the doctor charges $100 for an office visit. The patient is required to pay $20 and the insurance carrier will pay $80.

However, if the doctor tells the patient that he will waive the patient co-pay and accept the insurance payment of $80 as full payment, then the doctor has committed a crime called insurance fraud. This is because the insurance industry says the doctor's fee was really $80 since that is the amount he is expecting.

Ironically, if the insurance company receives a discount and does not tell the insured, this is perfectly acceptable to the insurance industry. Thus, it's OK for the insurance company to receive discounts, but if the doctor gives the patient a discount rather than the insurance company, then the doctor has committed a crime.

The insurance industry is used to getting its way: Proposition 103 (still being fought by the insurance industry despite the will of the people and the Supreme Court), the post-earthquake homeowners insurance moratorium (I could not buy any homeowners insurance from a commercial carrier, only through the state-run California Fair Plan), etc. When the voters or policyholders complain, the insurance companies threaten to cancel policies or stop selling insurance.

The insurance industry has a history of deceitful tactics and avoidance of admitting any wrongdoing regardless of the evidence against them. Perhaps it's about time an investigation be launched into the conduct of insurance companies to protect consumers.

MARK L. FREIFELD

Encino

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