Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. Public Perception and Experiences with Managed Care - Report commissioned by the Californian Managed Health Care Improvement Task Force



The Task Force Survey was intended to document the extent and nature of difficulties Californians report with their health insurance plan. While not a comparative "complaints report card", it is included here as it provides some insights into the general pattern of problems or complaints. It is also useful in identifying the proportion of insured consumers with problems who actually contact state government complaints units, and consumers' perceptions about the reliability of different sources of complaints information.


  1. Sample - Conducted via telephone interviews, the Survey sampled 3 different populations -
  2. general insured population;
  3. insured adults who were "dissatisfied" or "very dissatisfied" with their current health insurance plan and/or who had one or more problems with their health insurance plan in the last 12 months; and
  4. insured adults who had been hospitalized in the past 12 months and/or had at least one chronic condition in a specified list.


Frequency of problems - In total, 42% of insured Californians (6.72 million people) reported having had one or more problems with their health insurance plan in the past year. However not all these problems are severe, as evidenced by the fact that even about 25% of Californians who are "very satisfied" with their health plan also report having had a problem in the past year. Also, the Survey made no attempt to determine whether consumer problems were justified or not. A similar survey conducted by the Lewin group in Sacramento found that 27% of consumers had insurance problems.

Type and severity of problems - Of Californians reporting a problem with their health insurance plan in the past year, the primary problems fell into five categories:

  1. Care or services - 32%;
  2. Benefits or coverage - 21%;
  3. Choice - 16%
  4. Claims or payment - 14%; and
  5. Accessibility - 7%.

Severity of problems was assessed by whether there was an associated financial loss (27% of consumers), time lost from work (20%) and health impacts (32%).

Table 3.1 provides further disaggregation of the types of problems, several of which are relevant to examining the implementation of managed care.

Table 3.1: Primary problem for Californians reporting a problem with their health insurance plan in the past year, 1997

Problem Category

% reporting this as the primary problem


32% total

Not receiving the most appropriate medical care or what you need


Doctors/nurses/administrators/staff insensitive or not helpful


Delays in getting needed care


Difficulty in getting referral to a specialist



21% total

Plan not covering important benefits needed


Misunderstanding over benefits or coverage


Being denied care or treatment



16% total

Difficulty selecting a doctor or hospital


Forced to change doctors


Forced to change medication



14% total

A problem with billing or payment of claims or premiums



7% total

Language or communication problems


Transportation problems


Did not report any primary problem


Source: Improving Managed Health Care in California, Findings and Recommendations, Volume 2, January 1998; p25

Hierarchy of complaints resolution - Of insured Californians with a health insurance problem in the past year, 57% (3.8 million people) tried to resolve their problem. Figure 3.1, which shows the types of actions taken by Californians to resolve their problems, indicates that very few consumers with insurance problems actually contact state government agencies - only 4% of consumers with a problem, equivalent to 269,000 Californians. Health care providers, health plans, employer benefits offices and friends are much more likely to be consulted as a source of information by consumers with health insurance problems.

In commenting on the Survey findings in a letter to the Taskforce, the Director of the Center for Health Care Rights noted that "consumers frequently do not know where to turn".

Figure 3.1: Types of Actions Californians Take to Resolve Problems with their Health Insurance Plan, 1997

Figure 3.1: Types of Actions Californians Take to Resolve Problems with their Health Insurance Plan, 1997

Source: Improving Managed Health Care in California, Findings and Recoьmendations, Volume 2, January 1998; p31

Complaints resolution - While Californians were equally likely to turn to either their health provider or their health plan for help in resolving health insurance complaints, many who contacted their health plan were not satisfied with how it handled their complaint. Almost one third (29%) were either dissatisfied or very dissatisfied with how their health insurance plan handled their complaint.

Consumer trust in information providers - The Survey also asked insured Californians who they would trust to provide them with neutral and complete information about specific health insurance plans, hospitals and doctors in California. Only 13% agreed that they would trust a state government agency, while 64% preferred a private, not-for-profit agency to provide such information. Of the remainder, 7% said they would trust a private for-profit agency, 7% would not trust any of the above and 10% did not know.