Who you’re really fighting, when you fight insurance

Hey there –

Over on the podcast, we’re bringing back a story from our archive that’s one of my all time favorites — and that drives home a lesson about how health insurance really works for most people.

In 2021, we profiled someone who probably knows more than anybody about what it takes to fight insurance and win.

Laurie Todd fights insurance denials for a living, working under the moniker “The Insurance Warrior.” Her speciality: writing appeals when insurance companies deny high-stakes, high-dollar treatments.

Her first victory — which we chronicled in an episode tracing her origin story – was fighting to get coverage for her own life-saving cancer surgery. Since then, she claims to have notched victories for more than 200 other people.

Today’s podcast goes deep on one of Laurie’s early cases — super-dramatic and super-instructive. It taught Laurie one of the weirder truths about health insurance in America:

Fighting your health insurance often means fighting… your employer.

I’ll unpack that weirdness in a sec, but — just to tease today’s story: In this case, that employer was a $61-billion-dollar company.

You can listen here, or wherever you get your podcasts.

Wait, why would fighting my insurance mean fighting my employer?

…Cuz your employer might be your insurer.

OK, what?

Yeah, so, if you get your insurance through work, you probably have a card that says Blue Cross or Cigna or whatever — but more often than not, your employer is the actual insurer – meaning: the one who ultimately pays for claims.

Your employer pays Cigna or United whoever to administer your health plan — decide which providers are in-network, send out paperwork, approve and deny routine claims, all that stuff — but when it’s time for the health plan to send a check, it’s with the employer’s money.

The nerds in charge call this a “self-insured plan” or a “self-funded plan.”

… versus what we think of as normal insurance, which the nerds call “fully-insured plans”: where the insurance company collects monthly payments — premiums — and uses that money to pay for claims.

But “self-funded” plans are the norm for bosses. About two-thirds of workers — and almost 80% of workers at big companies — are in plans like these. (To check if that’s you: it might actually say it right on your card – or you might have to dig up your policy, or call HR.).

And here’s why you want to know — why this distinction between self-funded vs. fully-insured matters.

In a self-funded plan, you have fewer protections

Because state insurance regulators don’t have any jurisdiction over self-funded plans.

So if you’re in one and you run into a problem, your state regulator can’t help you.

Instead, the job of enforcing your rights falls to an office at the Federal Department of Labor that a 2023 government report called “significantly underfunded” — and has lost 20% of its staff this year.

The federal law that governs all this, called ERISA, also gives you fewer rights than state insurance regulators do.

A law firm that specializes in fighting insurance has a webpage with the headline: How to Talk to People About ERISA Health Insurance Denials. The first answer, in big type: You start with a hug.

Under ERISA, it says, “employer-sponsored health plans were somehow able to slither into protections that were initially designed for union pension funds.”

…which seems pretty different, yeah?

Yikes, where does that leave me?

We talked once with Steve Benasso, an HR guy who prided himself on being a bulldog, fighting bogus insurance denials on behalf of his colleagues.

Steve gave what’s still one of my favorite pieces of advice to anyone fighting over a medical bill or an insurance denial:

But not all of us get to work with someone like Steve Benasso.

In that case, especially if the stakes are high, you may need to go to war. You’ll want all the lessons you can get from people like Laurie Todd, from today’s podcast.

And it just so happens: We’ve just compiled a new Starter Pack with the best advice we’ve gotten on this topic — on the podcast and in First Aid Kit — our website, right here. You may want to bookmark it, just in case.

While we have you here: We could use your help

If you’re a fan of our show, or this newsletter, you know we’ve been up to A TON this year.

We took this newsletter-thing weekly, added starter packs to our website, and put together a whole playbook to help you deal with the high cost of prescription drugs.

To keep that momentum going, we’re looking to raise $75,000 by the end of the year. And that’s where you come in. Because: Donations from people like you are what powers our work.

So here’s our first goal: We want 100 people to make their first-ever donation September 5. Could that be you? Please go ahead and chip in.

Donate now.

Thanks and catch you next time. Until then, take care of yourself.

– Dan