Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. 2. 1998 Oregon Complaint Report Part II



Scope - This report comprises all complaints closed in Oregon in 1998 against all companies covering all lines of insurance business (e.g. property and casualty, automobile etc). The report provides a more detailed breakdown of the "reason" and the "disposition" of the complaint - information that is not included in the Consumer Guide to Oregon Insurance Complaints. The report includes a summary table for all closed complaints, summary tables for each insurance line (with the relevant line being Accident and Health) and tables for every individual company showing the complaint reason and disposition.

Data analysis

In 1998 there were 1190 complaints closed against accident and health insurance. The most common reasons for complaints included: denial of claim (28%), other claims handling (23%) and unsatisfactory settlement offer (11%). See Table 6.2 below for additional detail.

Compared to some other states such as Texas, Oregon has a relatively low share of "claims handling delays" complaints at 7.6% of all accident and health complaints. While the Oregon Unfair Claims Settlement Act does include reference to prompt payment, the low rate of these claims may reflect the fact that the Insurance Division since about 1990 has followed a policy of only accepting claims from patients rather than providers. The decision not to accept provider complaints reflects the Division's view that it would prefer not to have a major role as a debt collector for providers. It occurred in response to a 1990 initiative by a Californian private company which provided seminars to medical office bookkeeping staff advising them to routinely file complaints with state insurance departments and giving staff sample complaints letters. While the Insurance Division has, since 1990, advised providers to get consumers to make the complaint directly, it is considering relaxing this position somewhat given the emergence of new complaints issues arising solely between the provider and plan (e.g. the status of contracts).

Of the 334 denial of claim complaints, the disposition was as follows:

  • 37% company position upheld;
  • 16% additional payment;
  • 13% claim settled;
  • 8% other no relief;
  • 7% claim reopened;
  • 6% other relief;
  • 5% coverage extended;
  • 4% no jurisdiction;
  • 3% question of fact; and
  • 1% insufficient information.

Table 6.2: Reasons for Complaints, All Closed Accident and Health Complaints, Oregon, 1998

Reason Number %
Denial of claim 334 28.1
Other claims handling 279 23.4
Unsatisfactory settlement offer 127 10.7
Claims handling delays 91 7.6
Refusal to insure 67 5.6
Premium & rating 54 4.5
Cancellation/renewal 52 4.4
Other policyholder service 42 3.5
Other marketing and sales 38 3.2
Refunds 30 2.5
Premium notice/billing 18 1.5
Coordination of benefits 13 1.1
Other underwriting 12 1.0
Agent handling 11 0.9
Misrepresentation 8 0.7
Endorsement/rider 5 0.4
Misleading advertising 3 0.3
Post claim underwriting 2 0.2
Underwriting delays 2 0.2
Replacement/twisting 1 0.1
Marketing and sales delays 1 0.1
Total 1190  

Assessment of the Report

Provides complaint categories - The report provides a more detailed breakdown relative to the Consumer Guide of complaint categories and disposition. It is of most use for people interested in examining the detail of individual companies.

Difficulty of company comparisons - The report is not designed to allow easy comparisons of types of complaints across individual plans. While one could theoretically examine issues such as "denial of claims" across individual plans, this is complicated by the fact that the report does not include premium volume data allowing the calculation of complaints rates. Also the report provides data on companies which may offer insurance across multiple lines of business. Thus while it may be reasonable to assume that all complaints about Regence HMO are to do with health insurance, the same cannot be implied for other companies providing multiple insurance products.

Patient protection implementation - As the complaint categories are quite broad (e.g. denial of claim) the report is of limited use in tracking patient protection legislation implementation.