Is fighting health insurance companies a bad idea?

You have the right to fight your health insurance company if you believe you’ve been treated unfairly, but is doing so a bad idea? That depends on how you define the term. Fighting the health insurance company will not be easy, nor will it end quickly, but if you have a legitimate case that can be proven in a court of law you stand a good chance of getting a settlement or winning a court case.

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For all intents and purposes, there are two main legal stances consumers can take against a health insurance company. They are known as “breach of contract” and “bad faith.” Most disputes between health insurance companies and their customers fall under one of these two categories. Once an insurance company knows that you’re aware of your legal standing they tend to be more cooperative.

What is breach of contract when talking about health insurance?

In the United States, contract law is one of the more concrete areas of law that is relatively easy to define. So whether you’re talking about health insurance or any other contract, the idea of breach of contract stems from one party not upholding their end of the agreement.

For example, your health insurance is a contract between you and your provider. You agree to pay monthly premiums, while the insurance company agrees to cover your medical bills under certain limits after health insurance claims processing is completed.  If you fail to pay your monthly health insurance premiums, you have breached the contract.

A health insurance company that promises to give you certain types of coverage and then fails to do so is guilty of breach of contract. When such a case can clearly be demonstrated with sufficient evidence, the insurance company will almost always lose in court. The tricky part is gathering sufficient evidence to convince a judge or jury! A skilled attorney with knowledge of the healthcare industry and contract law should be able to find sufficient evidence if a breach of contract has occurred.

What is bad faith in relation to health insurance?

Bad faith is a legal standing which essentially accuses one party to a contract of not being honest or forthright in his intentions. For a more concrete definition, the online legal dictionary, Law.com,defines bad faith as an intentional dishonest act which consists of not fulfilling legal or contractual obligations, misleading someone, entering an agreement without intending or being capable of fulfilling it, or simply not being honest in your dealings with other people.

In simple terms, proving to a court an insurance company has acted in bad faith requires you to demonstrate that they intentionally misled you. This would probably be in terms of how the health insurance companies qualify you for coverage, contract language or policy details, if the health insurance company had no intention of making clear what they would or would not cover.

For example, you might have bad faith standing if your health insurance policy documents imply full coverage for cancer treatment but do not spell out the terms in detail. Then you were denied payment for certain procedures requested by your doctor. The difficult thing about bad faith is convincing a judge or jury of the intent of the insurance company to be dishonest.

Is it worth my while to fight insurance companies and their lawyers?

Whether or not it’s worth your while to fight the health insurance company is dependent largely upon your circumstances and your resources. If you do decide to pursue such action be sure to determine beforehand whether or not you’re willing to go as far as civil court. If not, you still might pursue a fight on your own, hoping to get a settlement before you need the intervention of a court.

The good news, according to an article published by Smart Money last March, is that many health insurance companies will back down if you persist and fight hard enough.  There are government regulations for health insurance companies that must be adhered to and reputable insurance companies do not want to jeopardize their ratings.

If you do decide your disagreement warrants court intervention be sure to look for an attorney who works on an outcome based fee schedule. In other words, retain an attorney who will not charge you a dime unless you win your case. This will tell you right away whether you have a strong enough case to proceed, as no such lawyer is going to take a chance on a weak case. Furthermore, it forces your attorney to do the best job possible in order to win your case.

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