Chairman Rockefeller's Remarks on Consumer Choices and Transparency in the Health Insurance Industry

June 24, 2009

JDR Head ShotToday’s hearing is about protecting consumers so I want to start by talking about a consumer.
Her name is Jill Faddis.  Back in 2001, she and her husband were living in Seattle, Washington.  They had health insurance coverage through the Aetna insurance company.
Their Aetna policy covered visits to doctors who were not part Aetna’s network.  The policy promised the Faddises that if they went to see out-of-network doctors, Aetna would reimburse them at the “usual and customary” rate for the Seattle area.
So relying on Aetna’s promise, Jill Faddis’s husband went to visit a local periodontist.  A periodontist is a dentist who has special training in treating serious gum problems.  The periodontist charged Mr. Faddis $140 dollars for the visit.   The charge was sent to Aetna, which processed the claim and reimbursed the Faddises only $65 for the visit.  
Aetna told Mrs. Faddis that $65 dollars was the “usual and customary” charge for this service, and that she and her husband would have to pay the $75 dollar balance on the bill. 
Mrs. Faddis didn’t take Aetna’s word for it.  She took out her Yellow Pages and called every periodontist in her area.  There were about eleven or twelve of them.
I’d like to pass out a chart showing what she found.
She found that the actual “usual and customary” fee periodontists in her area were charging for the service was somewhere between $110 and $163 for the service.
She shared her research with Aetna.  She told them they had made a mistake.  Aetna told Mrs. Faddis they had not made a mistake.   Aetna told her that THEIR calculation of the “reasonable and customary” for the service was $65.
This story doesn’t have a happy ending.  Mr. and Mrs. Faddis paid the $75 dollars out of their own pocket, and went on with their lives, rather than continuing to fight a big insurance company.
This is a disheartening story.  And the thing that’s most disheartening about it is that it gets repeated millions of times a year.  Over and over again, consumers turn to their health insurer for help and clarity and they don’t get it.
They think they’ve paid for protection against the risk of high health-care expenses, but the insurance company has figured out a way to wiggle out of providing this protection.
The Faddises paid their $75 dollars and moved on.  But think about the consumer with $100,000 of medical bills for her breast cancer treatment.  Or think about the heart attack victim whose bills total $80,000. 
When insurance companies fail to meet their obligations to these people, it literally becomes a matter of life and death.
Consumers can’t make real choices because the insurance industry doesn’t use standard language or definitions.   And consumers can’t challenge insurance companies’ decisions because the companies don’t explain the terms of coverage in clear, understandable language.
This is unacceptable.
I’m very happy we have two health care experts today who can help us understand why consumers get such a raw deal from their insurance companies.  And I’m hoping they can give us some ideas about how we can level the playing field between consumers and the insurance industry. 
I’m also very pleased to welcome Mr. Wendell Potter to the Committee today.  He is a former insurance executive who is going to tell us about some of the tactics insurance companies use to keep consumers in the dark.
I want to express my sincere appreciation to Mr. Potter for coming forward at this important juncture in the health care debate, and for speaking publicly about the industry where he spent most of his career.
Before I close my remarks, I want to add a very important point:
A few months ago, this Committee started looking at the many problems consumers have with the health insurance industry, and we’re going to continue doing it.   In March, we had two hearings about the deceptive Ingenix database products that the insurance industry used to under-reimburse millions of consumers.
The Committee staff has been continuing to investigate this issue, and recently sent me a written report on what they have found so far.  I circulated this staff report to members this morning, and now ask unanimous consent to insert this report and its exhibits into the record of this hearing.
I look forward to our discussion today and to what we may learn about the parts of our health care system that are so desperately in need of reform.  As we pursue our goal of comprehensive health care reform legislation, we can’t forget consumers.