health insurance

[jimsharon]

What is the name of your state? Indiana
The company that I work for provided employees with group health insurance on the following basis. The company paid approximately half of the premium for the employee coverage. The employee paid the other half. Spouse and family coverage was available with the employee paying for the entire extra cost. The carrier that we were using got in financial trouble and can not pay over $10,000,000 in claims. The state of Indiana has taken control of the company and will be liquidating the company. The money that the state raises is not expected to cover anywhere near the outstanding claims. I asume that the state will try to "negotiate" claims with doctors, hospitals, etc. and try to get them to accept a reduced amount as full settlement. My question is- if this effort is not successful, who will be responsible to pay the outstanding claims? Will the individual (who had premiums taken out of their paychecks for medical insurance) be liable to pay for all or any medical services that they received that the insurance company did not pay? Is the employer liable to pay unpaid claims since they chose the insurance carrier?

 

[cbg]

The ultimate responsibility for any unpaid claims belongs to the person who recieved the services - i.e., the employee. This is the case whatever happens to the insurance, with very few exceptions.

However, you're jumping three steps ahead of the game. First of all, you're only assuming that the there will be negotiation for a reduced amount. Even if you are correct (and I agree it seems reasonable), there are several possibilities:

1.) The service provider will accept the reduced amount as the entire payment
2.) Your employer (who is not responsible for unpaid claims since they are neither responsible for or had pre-knowledge of the carrier's financial problems) will voluntarily pick up part or all of the unpaid balances.
3.) The service provider will work out a payment plan for the unpaid balances so that you don't get stuck with the entire thing all at once.
4.) The insurance commission will have an alternate solution that is enforced as part of the negotiation.

I know the answer you want to hear is that your employer will be forced to pay all the balances but that just isn't the case. They didn't cause the carrier to go bankrupt. It is highly unlikely that they knew the carrier was about to go bankrupt; otherwise, they'd have chosen another carrier in the first place. And they are not the ones that received the benefit of the services. The fact that they made the decision to use this carrier, in ignorance of the upcoming problems, does not make them responsible.