Cedric Stephens | Are health insurance providers treating customers fairly?

Michael Abrahams is an obstetrician, gynaecologist, and contributor to this newspaper. He also modestly describes himself as a social commentator and human-rights advocate.

Dr Abrahams’ back-to-back articles about trauma – physical and mental – the second on June 4, should be required reading for all leaders, real and would-be ‘influencers’ in society, including insurance company CEOs, regulators, and claims officials. His writings have, in addition, verified the claimant’s experiences that were featured in my article ‘Insurance Service Delivery for Traumatised Accident Victims’, last month.

Trauma, he argued, “is an emotional response to a stressful event. These events include not only childhood traumas such as abuse, neglect, exposure to dysfunction in the home and community, bullying, accidents, natural disasters and armed conflicts, but also similar traumas experienced in adulthood, including physical and sexual assaults.”

“The psychological response to trauma can give rise to adverse mental sequelae (a condition that results from a previous disease or injury) in adulthood such as anger- management issues, psychosexual dysfunction, dissociation (disconnection from thoughts, feelings, memories, and sense of identity), alexithymia (impairment of recognition and description of one’s emotional states), and mental disorders such as anxiety, depression, post-traumatic stress disorder, complex post-traumatic stress disorder, bipolar disorder, and borderline personality disorder. These outcomes have the potential to alter emotional regulation, thereby affecting our interpersonal skills and the way we interact with others,” he wrote.

His words were familiar. They are reminders of the many discussions my late wife, who was a counselling psychologist, and I had about how trauma impacts personal relationships and whether health insurance providers recognised the links between physical and mental illnesses in the coverage they offered.

Another Gleaner contributor, medical doctor and author Garth Rattray, wrote last Sunday about a health insurance provider’s bait-and-switch marketing tactics. While Dr Abrahams’ approach was clinical, Dr Rattray’s, in contrast, was anything but detached. His idealism was on full display when he wrote: “People don’t realise that healthcare workers in private practice have been sacrificing their profit margin(s) to remain affordable for their patients. It would be great if health insurance companies could try to remain affordable for our citizens, especially the elderly, retired ones.”

US trends in fashion, popular culture, cable television, and the use and application of technology, to cite four examples, influence local behaviours. Business entities, similarly, are influenced by ideas, practices, and technologies that originate in North America or elsewhere. The health insurance segment of the local life insurance industry (to use a more accurate label than Dr Rattray’s) employs modified US business models in their operations. Health insurance providers (and shareholders) are, therefore unlikely to shave their slim profit margins (according to one study) and share it with customers. Operations are profit-driven. Ethical issues distract executives from that goal.

The Jamaican health insurance landscape is complicated. Only the top five per cent to 10 per cent of the population, people in the high-income bracket, can buy health insurance plans with benefits and premiums payable in foreign currency and access to overseas medical care. Of the remaining 90 per cent to 95 per cent, only about one in four or 25 per cent can afford to buy private health insurance. They share three providers.

Technically, this is not a market but an oligopoly. This is a structure with a small number of firms that have significant control over prices and benefits. Competition is limited.

The remaining 75 per cent of the population depend on the public health system. They cannot afford to pre-fund their healthcare costs. A government study a few years ago found that Jamaica does not have the resources, like other countries, to finance a national health insurance plan. At the same time, the moneys allocated in the national budget to the health and wellness portfolio have been consistently below recommended levels.

Finally, the industry regulator has, historically, paid more attention to the industry’s life insurance segment and ignored operations in the health segment.

Health insurance providers, here and abroad, are notorious for protecting their bottom lines. Providers employ doctors and lawyers who operate in the background. Their job is to find reasons to avoid paying claims or to reduce payments for services provided by doctors, hospitals, and other caregivers. Their strategy is to protect profit margins and increase share prices.

ProPublica, according to information on its website, is an independent, US non-profit newsroom that produces investigative journalism. The company’s mission is to “expose abuses of power and betrayals of the public trust by government, business, and other institutions, using the moral force of investigative journalism”. On January 24, it published an article, ‘Insurers Failed to Comply with Mental Health Coverage Law, Department of Labor Report Finds’, which offers insights into how the US$1.6 trillion individual health industry operates.

The probe found widespread non-compliance and violations of federal law in how health plans and insurers cover mental health care, echoing the findings of a recent ProPublica investigation.

Federal law, the Mental Health Parity and Addiction Equity Act, requires health insurance plans to provide the same access to mental-health care as they do to other types of medical care.

ProPublica said it spent “the last year investigating how insurers interfere with mental health treatment, including employing aggressive tactics that push therapists out of network; deploying an algorithmic system to limit coverage; creating ghost networks; cutting access to treatment for children with autism; relying on doctors whose judgments have been criticized by courts; and using patients’ progress to justify denials”.

The news site discussed in an October 23, 2024 report the results of other investigations it conducted that provided information about claims for physical illnesses and/or medical conditions were managed to maximise profit.

Have local health insurance providers been inoculated against maladies like those that have affected their counterparts in the United States?

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com