HEALTH PLANS: You sleep with scumbags, you expect to catch nasty diseases

More on the incredible United Healthcare/Golden Rule story that Joe Paduda’s been following. Joe’s latest is called Who is UHC’s customer?

Essentially United’ high deductible subsidiary Golden Rule is advertising that it’s selling a HDHP with agreed procedure rates for customers—just like the vast majority of PPOs out there. But when the time comes, they are contractually allowing their providers to balance bill the customer over and above the rates they’ve agreed. The real kicker is that are keeping that fact secret from their customers because—absolutely incredibly—they claim it’s a trade secret between plan and provider. So they tell the customer that they’re buying into a network with pre-negotiated rates, but it’s not true. This is pretty much straight fraud.

Sadly, Golden Rule has been a scumbag organization since day 1. It was started by Patrick “looney” Rooney and its goal has been to change the law so that it can sell more of its highly underwritten, high margin HDHP policies. After numerous contributions to certain Republicans, who lets face it couldn’t give a rat’s arse about the poor consumer despite all their high fallutin rhetoric about 21st century health care, the HSA is now the law of the land and plans like Golden Rule (as well as one hopes somewhat more ethical ones) are very hot.

So hot that managed care companies decided (as I’ve said before) that acquisition rather than imitation is the sincerest form of flattery.  UnitedHealth Corporation bought Golden Rule for $500m in 2003 when the HSA law was passed. Rooney meanwhile moved onto better things like buying basically reverse racist anti-Kerry commercials on black radio stations in the run-up to the 2004 election.

In a Businessweek article last year United said that it had cleaned up Golden Rule’s scummier practices: 

Soaring demand is one reason why UnitedHealth paid $500 million in 2003 for Golden Rule, of Lawrenceville, Ill., problems and all. Since 1995, Golden Rule has faced 15 investigations by insurance officials for aggressive sales tactics and questionable marketing. That compares with just nine investigations at UnitedHealth, though Golden Rule’s revenues barely equaled 3% of UnitedHealth’s 2003 revenues. At its low point, in 2002, Golden Rule settled for $660,000 a nine-state investigation that found its small-group policies required employees to submit "proof of good health," a violation of federal health-care rules. In addition to the payment, Golden Rule agreed to make "substantive" changes in the way it does business in those states.Since taking over Golden Rule, UnitedHealth has made further strides. Complaints against the outfit have dropped by more than half. And as UnitedHealth expands Golden Rule, it is encouraging consumers to check health-care costs via its online "treatment cost estimator" so they aren’t surprised by big out-of-pocket bills. "When we acquire a company, we take responsibility for all their past conduct," says Mark F. Lindsay, UnitedHealth’s vice-president for communications and strategy.

Apparently you have to now actually have the double secret “treatment cost estimator” which tells you what your balance billing exposure is on top of the secret negotiated rate

All of which goes to show that you can take these trash plans out of the trailer park — into the big respectable corporation — but you can’t take the trailer park trash out of the plan. (With apologies to THCB readers who live in trailers). And of course the problems they bring with them may just spread over to the rest of the organization—which since 2004 seems to be back-sliding on its “be nice to providers” mantra with nasty little episodes in Arizona and New York.

Then again given the charges filed against Brocade’s CEO for backdating stock options and the virtual certainty that after their screwing around with the dating of option awards they are next on the SEC/DOJ hit list, it may just be that instead of sorting out this mess United’s senior management has got, ahem, other things on its mind.

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12 replies »

  1. Heya i’m for the first time here. I found this board and I to find It really useful & it helped me out a lot. I’m hoping to give something again and help others such as
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  2. Get this – not only are they nasty, they are stupid. I am a long distance runner and was denied coverage after my very good EKG results from my last physical were deemed to be a risk. You see, my low resting heart rate, perfect cholesterol, and every other key helath indicator from my last exam were ignored. Since runners have low resting heart rates, I was denied “due to resting heart rate of 42 BPM”. I explained this 3 times to the ignorant client service girl and gave them my docs number to verify it. Golden Rule would rather insure the sick than the healthy. What a joke.

  3. Can anyone on here tell me if they have ever heard of anyone ever winning a case against GRule? While completing the 8 pages on my insurance application, I failed to enter ONE item that I didn’t even remember! My deductible for 2007 is now met and I need surgery for that item. I am still in the two year period where they can contest my surgery, therefore, I have not had the surgery. Dec 31 is almost here and come January 2008, I will have ANOTHER $5800.00 deductible to meet!! GRule told me if I got the surgery~~they might pay it! My premium is $1900.00 per quarter. I am ready to cancel this policy!! thanks for listening.

  4. I signed up with Golden Rule today. Now I want to cancel with them and I’m scared about getting the run-around with trying to cancel. Did you have any problems David with canceling after 5 days?

  5. I recently applied for Golden Rule’s HSA. I was quoted a base rate of $72 over the phone and then went through the application interview. After 2 days, I called to find out that the rate was hiked to $79 (I was dropped from the Premiere rate – that i was never told about) because of my weight. I am 5’10” 137#. Is that ridiculous? I was given a higher rate for being thin…and I was never told that there was a 2-tier rate. (In addition, i was asked questions like: “Do you plan to see a doctore in the next 6 monhts?” How should I know? I consider this intimidation tactics. I told them that was a ridiculous question to ask a prospective client.)
    So I called my sales agent and sent him an email and got no response. Then I called to speak to a supervisor and was told they were all busy. They took 2 messages from me and never returned my calls.
    SO I cancelled the policy after 5 days.

  6. You are SO right about Golden Rule being a sleazy operator in health insurance. I have almost thirty years experience in health insurance and I first became acquainted with GR about 20 years ago. They were beating the pants off everyone else so if I couldn’t beat them, I would join them.
    I attended a meeting put on by a GR general agent and he said that GR’s rates were so low because they vigorously and aggressively fought fraud. We were instricted to tell anyone that applied for health insurance through GR that if a claim was filed in the early years of the policy, it would take longer to pay because GR made it a point to investigate claims for fraud and pre-existing conditions not properly disclosed in the application.
    Most people bought that crap and it didn’t take me long to learn that every claim filed during the two year contestable period was put under a microscope. If GR could get out of paying a claim for any reason, they did. Very often they would just drag their feet and hope that the insured would just stop fighting. I wonder if Golden Rule was the model for the “Great Beneift Insurance Company” in John Grisham’s ‘The Rainmaker”.
    In early 1989, Golden Rule filed the papers requesting an 80% rate increase for their individual non group policies in Ohio. The Ohio Department of Insurance denied thier request saying it was excessive. Golden Rule then sent letters to everyone in that class affected by the rate increase that “due to a hostile regulatory environment in Ohio”, they were cancelling all policies effective with the next renewal date.
    By then I wasn’t selling much Golden Rule, but a lot of my clients received those letters and called me to explain what was happening. The “hostile regulatory environment” really got me. In the cancellaiton letter, the insured was instructed to make their wishes known to the Ohio Department of Insurance and their state representatives.
    I told my clients the truth and replaced just about all the Golden Rule policies I had (and about every one I ran across). I also sent a letter to GR resigning my appointment with them. Just about all my clients were livid about Golden Rule after I spoke the truth. However apparently enough people affected by this cancellation threat had done what GR asked them to do because in a few months Golden Rule got their rate increase.
    I haven’t sold Golden Rule since 1988 and when people ask me about the company, I tell them that I don’t want to be sued. Golden Rule has such a bad record of not paying claims and when one of their reps is sued, they won’t lift a finger. Any licensed agent that sells Golden Rule is playing with fire and they had better have a very good E & O policy that is paid current if they are selling that crap.

  7. I am a Golden Rule HSA customer and am very disappointed. Very poor service. Very user un-friendly. Can anyone please recommend a good, ethical HSA provider co. in TN?

  8. No, he didnt like them Ron was associated with Assurrant a spin off from Fortis.

  9. Is teh the firm that oour HSA advocate was affiliated? Or am I being unfair to our own loon by associating him with looney Rooney?

  10. This is clearly an outrageous business practice. People who buy high deductible health plans probably view access to the contracted rates as almost as important as the coverage itself. It should not make any difference whether the deductible has been hit or not when services are rendered. If it’s covered, the contracted rate should apply, period. If the company (and any others who have similar contractural arrangements) don’t fix this, it should be done via regulatory action if necessary.
    I find it especially ironic that such slimy business practices come from a company that calls itself “Golden Rule.” This is the type of behavior that I would more likely associate with the fictional law firm of Dewey, Cheatham, & Howe.

  11. You just gotta love this for profit, free enterprise healthcare system where the patient is just an access point to their bank account.