Baffled and buried in blizzard of cancellations

Local insurance broker Kirstine Sorenson has a simple plea: Make it stop.

Sorenson approached us at a recent press conference wanting to know why her clients are getting notices canceling perfectly good coverage bought through Nevada Health Link.

After all, the system’s billing problems are becoming legendary in the insurance community. With those known flaws, wouldn’t it be smart for the system’s contractor, Xerox, to stop advising carriers to terminate plans until it can verify who’s actually not paying, Sorenson said.

“They have a right to terminate plans if people legitimately aren’t paying. But from a liability and PR standpoint, don’t issue cancellation notices automatically, if you can stop that process,” she said. “The consequences are way too serious, especially because they’re already being sued.”

For its part, Xerox said in a statement that it’s not canceling anyone’s policies. Nor does it develop guidelines under which policies are canceled, the company said.

That’s technically true. Insurance carriers are actually the ones who send out cancellation notices. But brokers note that carriers rely on billing and payment information from Xerox, and if those details are wrong — if Xerox tells insurers a paying client hasn’t paid — then carriers are acting on bad information.

The Silver State Health Insurance Exchange puts the blame squarely on Xerox, too.

Spokesman CJ Bawden said the exchange is bringing in a financial team to fix “Xerox’s billing issues.”

“Far too many Nevadans have encountered billing and payment problems with the Xerox system and resolutions have not been provided in a timely manner by the contractor,” Bawden added. “The exchange’s top priority is making sure that Nevadans who have enrolled in coverage have access to their insurance plan.”

Keeping access to a plan isn’t guaranteed these days, given a raft of recent billing problems.

Sorenson, an associate with local insurance brokerage Pat Casale &Associates, said her firm has watched clients get cancellation notices for being as little as 9 cents short on a premium payment. That’s not something carriers cancel for on privately sold plans, she said. The usual practice is to tack those last few cents onto next month’s bill.

“Obviously, if a check was that close to the premium, then the intent was to pay the full amount,” Sorenson said.

She added that she’s not sure how widespread the billing snafu is.

But “if it’s happened to one person, then it’s happened to many, because it’s a systematic issue,” she said.

Carothers Insurance Agency President Christopher Carothers said all of his brokers have reported issues in the last three weeks with calculation of the federal tax credit designed to lower premiums for low- and middle-income earners. That’s a problem because a bad tax credit could mean consumers are underpaying their premiums. And paying too little could lead to that dreaded termination letter.

He agreed with Sorenson’s recommendation of a cancellation moratorium, at least until Xerox can put together a unit that hand-checks every termination to make sure it’s accurate.

“There’s no doubt that Xerox should be forgiving this, and making sure people can work through these premium issues. Otherwise, all this work we’ve done — all of these people we’ve written (policies for) — is in vain. A lot of people have put a lot of good faith into trying to make this work.”

If you got coverage through Nevada Health Link, you can act to protect yourself from an unexpected cancellation.

For starters, if you bought and paid for coverage through the exchange and you never got ID cards or invoices, you may not have any coverage, Carothers said. Reach out to the health link immediately to begin sorting out your issues.

If you know your coverage is in place, look at your bank account to make sure every premium payment you’ve made to Nevada Health Link has cleared, Sorenson advised. If your coverage began in January, you should have records of six canceled checks, or six online payments posted. It’s not a bad idea to check invoices and look for cleared payments every month until the end of 2014, to ensure your coverage doesn’t lapse.

“Just because you sent in a check doesn’t mean it was processed,” Sorenson said. “We have clients who have mailed checks that didn’t get cashed, as well as clients whose checks got cashed but were not properly credited to their account.”

Also, if you notice any funny business with your premium, speak up immediately. Carothers cautioned against getting excited if your premium invoice comes in lower than the price Nevada Health Link quoted you. The discrepancy could mean you’re enrolled in the wrong plan, or that your tax credit was tabulated wrong. So call and verify why the premium looks different.

If you get a cancellation letter, don’t panic. Nevada Health Link can’t cancel you immediately. Gather your bank statements listing your canceled checks, get your health exchange number from your invoice and phone Nevada Health Link’s call center as soon as you can at 855-768-5465. If you don’t get anywhere, an insurance broker may be able to help you cut through the red tape at no direct charge to you.

And finally, be patient. The board of the state exchange is studying how to transfer responsibility for premium-billing from Nevada Health Link directly to carriers themselves. That move should eliminate the information disconnect that’s costing some members their coverage.