Prostate cancer treatment, a health insurance enigma
I bought a health insurance policy about 15 years ago. One of its most attractive features was the major medical (MM) coverage. It had a lifetime limit of $2.5 million which was quite a lot of money at that time. MM comes into play after the
limits on the basic plan are used up. I faithfully paid the premiums over the years and made claims under the basic plan, all of which were settled satisfactorily.
Late last year I was diagnosed with prostate cancer. My doctor recommended radiotherapy. The treatment was estimated at $2 million. After checking with my insurer, I was led to believe that my MM account had funds to pay about 75 per cent of the charges. I learned later that that information was incorrect. I will have to find 85 per cent or $1.7 million while the policy will only pay $300,000. This is substantially less than I had expected. Can I do anything to get the company to increase its offer?
- T.G.S., Spanish Town PO,
INSURANCE HELPLINE: When I wrote 'Are insurance customers treated fairly?' a few weeks ago, I had no idea that the two articles would have produced the reactions that they did. Four weeks later, the after-effects are still being felt.
I learnt a few days ago, for example, that the articles were discussed on a radio programme! Thanks very much for sharing your information with me. It is very relevant to theme of fairness in insurance transactions that I wrote about.
I hope that the comments that follow will help to get you the extra money to undertake the course of treatment your doctor recommended - and also, that it assist others to take a careful look at their plans and avoid nasty surprises.
Discussions about health insurance that cover the treatment of prostate cancer should begin by recognising some basic facts about the ailment. Jamaica Cancer Society Executive Director Yulit Gordon, according to The Jamaica Information Service, said in 2013 that "there is absolutely no denying that prostate cancer poses a public health risk ... it continues to be the leading cause of cancer-related deaths among our Jamaican adult males".
The same source also quoted her as saying "the fact remains that Jamaica has the highest mortality rate for prostate cancer in the world".
Medical experts in the UWI's Depart-ment of Surgery agree with those comments. "Jamaica has the highest incidence rate of prostate cancer in the world...," they wrote in the abstract of a scholarly report.
The information that follows is from your insurer's product brochure. I would have preferred to have read your contract of insurance. In its absence, the brochure will have to do..
WHAT THE HEALTH PLAN
APPEARS TO COVER
Your plan benefits are listed in two columns. They describe, for the main part, a series of benefits and/or medical procedures and the corresponding limits that the insurance will pay. For example, the benefits for hospitalisation costs are at 'x' dollars per day/per annum; laboratory tests and prescription drugs, and the like, are also listed.
Entitlements for chemotherapy and radiotherapy with limits of $300,000 per annum for each are noted among the items on the list. Near to the end of the second column, there is a section devoted to major medical, with a lifetime limit of $2.5 million. This suggests to me - someone who has training and experience in reading insurance documents - that all of the other benefits that are listed before are part of the basic insurance plan.
It is only when one reads the entire schedule of benefits in the both columns, and uses a magnifying glass to decipher the footnotes at the end of the second column, that one notices that the limit for radiotherapy of $300,000 per annum is intended to form part of the lifetime major medical limit of $2.5 million, even though it is not listed under major medical.
The company has interpreted the benefit for radiotherapy at $300,000 full stop. This is even though there is at least one other meaning of that particular benefit, based on how the information is presented. This point is at the heart of the difference in interpretation between you and the company.
The company advised you on February 3 that your "major medical plan did not operate in the normal manner when applied to radiotherapy for the treatment of prostate cancer". It is "treated as a basic benefit that is applied each year".
Even though this may have been the com-pany's intention, that idea was not clearly communicated in the
product literature and your informant at the company's branch office appeared to have been unaware of
that information. The insurer's subsequent comments about the $300,000 limit also raise questions about how the basic and major medical benefits are defined and how they normally operate.
The Fourth Edi-tion of The Dic-tionary of Insurance Terms provides the answers. It says that major medical insurance coverage is "in excess of that provided by a basic hospital medical insurance plan. After the limits of coverage have been exhausted under a basic medical plan, major medical then covers medical expenses relating to room and board; physician's fees; miscellaneous expenses such as bandages, operating room expenses, X-ray and fluoroscopy. There may be a lifetime limit. For example, if the lifetime limit is $500,000 and an insured uses $100,000 in a given year, the lifetime limit would be reduced to $400,000".
Major medical is intended to apply to life-threatening illnesses. Basic medical plans apply to routine illnesses, according to other sources.
Given the incident rate of prostate cancer in Jamaica and the high costs associated with treatment, it seems quite reasonable for your insurer to impose monetary limits for this aspect of its health plan. This is done primarily to protect their finances.
The method your insurer has used to communicate this information to customers and prospective customers is not, in my judgement, consistent with international best practices, in particular, those relating to treating customers fairly.
More specifically, the information in the product brochure about the benefit for radiotherapy can be described as unclear and misleading. Courts tend to interpret ambiguities like these in favour of policyholders.
It can also be argued that given the prevalence of prostate cancer in Jamaica, customers would normally have an expectation that major medical insurance would ordinarily cover the reasonable expenses associated with the treatment of that condition, subject to the maximum in lifetime limit. If, however, a limit for radiotherapy was being imposed that was below the lifetime limit, that limit should be clearly stated by the insurer.
I recommend that you seek an audience with a senior executive of the company to argue your case. Best of luck.
n Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: email@example.com