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Group Health Insurance – Woo vs Common Cents

SGU listener Jim recently wrote the following:

My company sent out a health benefits newsletter that really stuck in my throat. (I’d love to send the pamphlet to you, but I didn’t think that would be prudent since it is a national company…and I like my job.) Here’s what it says (note: BCBS is Blue Cross Blue Shield):

BCBS is pleased to offer discounts (up to 30%) on complementary and alternative medicine products and services such as:

. Fitness Centers
. Nutrition Counseling
. Spas
. Massage Therapy
. Holistic Practitioners
. Acupuncture
. Vitamins
. Pilates
. Yoga
. Health Magazines, and many others

Two things irritate me here. First, they mix legit items like Fitness and Nutritional counseling with such crap as Acupuncture. Ugh! The context gives legitimacy to the woo.

I work in the group benefits insurance industry, so I’ll try to shed a little light on this.

More often than not, insurance companies offer coverage “packages” to their clients. An example of this would be going to McDonald’s and only being able to choose from their combo meals with no order customization. You pick combo #2, you get the Big Mac, the medium fries and the medium Coke, period. No option to super-size, small-size, make it a Diet Coke, a Sprite, a salad, etc.

This is the same for most Group Benefits Insurance Packages. They are pre-written contracts that your company (or union) can choose from. There are exceptions to the rule, mostly with extremely large companies or unions such as the federal government, where they have their own people write the contract and present it to different insurance companies competing for their business.

The woo usually comes in at the underwriting phase.  When the contract is actually written.  Insurance companies are well aware of the value people put on their freedom of choice when it comes to medical treatment (or anything really).  Even though some people might not make the best decision for themselves, are not educated enough on a certain topic, or have a bias towards one type of treatment, insurance companies don’t really look at HOW the patient (client) is treated, just as long as they are happy and continue to pay their premiums.  An insurance contract will be more appealing to more people if it covers more avenues of treatment.

It’s funny because as I write this I keep thinking of the section called “General Exclusions and Limitations” of insurance contracts and how probably about 95% of them have a clause similar to this:

No reimbursement will be made for […]  a treatment, device or drug which is considered experimental and has not been fully evaluated and deemed safe and effective.

As I continue to reimburse chiropractors, naturopaths and acupuncturists.  Ahh, cognitive dissonance, my great friend.

So the bottom line is money.  People are willing to pay more for more choices.  The woo stuff that your company covers is not recognized or endorsed by them, nor is it recognized or endorsed by the insurance company selling you the contract.  Only your money is.

As an aside, I work for a Canadian insurance company.  My observations may not apply to companies in other countries.  Our health care system is very different than, say, America’s.  And so, perhaps medical insurance companies operate differently there.  Keep that in mind.

6 comments to Group Health Insurance – Woo vs Common Cents

  • Have you considered that insurance companies know woo woo doesn’t work but fund it anyway because it is cheaper than conventional medicine? People feel better when a quack says “There there dear – what did those beastly REAL Doctors do to you…?”

    They may be on to something. Or perhaps I’m developing a conspiracy theory about it.

    Meh – can’t decide. Good post.

  • And that’s where the fact that I’m talking about Canada comes into play. What you’re suggesting is quite posible in the US, but since insurance companies don’t pay for conventional science-based basic medical treatments here (that’s usually paid by our province), I don’t think that would apply.

    In fact there are clauses in insurance contracts here that state that any service by an MD is NOT covered. That’s because any “medically necessary” service will be covered by the province.

  • johnno

    I work for an American insurance company. I write benefits for over 100 companies large and small. I see a lot of woo in the large companies,most of which fund there own plans then we administrate. It seems to come down to offering variety and the assumption that this is a benefit is something of value to the employees. It is my opinion that the people who think this crap is efficacious are extremely vocal with their HR representatives while we skeptics tend to not scream about science based medicine. My company standardly does not cover holistic, vitamins, acupuncture etc but if companies want it they can pay for it. For the insurance company if covering this stuff can close a sale then they sell it.

  • Mike I too am Canadian (Kelowna). I agree with Johnno – more likely to be a sales tool more than endorsement of woo. Still frustrating though isn’t it?

    Carry on!! Pip pip and all that…

  • Yep, like I wrote, neither the client company nor the insurance company actually endorse this crap. It’s all about the dollars.

  • radiantmatrix

    You may be the perfect person to ask this of. I’ve long held that chiropractic is 99% crap — I’ve heard that there can be some benefit for certain types of back/spine problems, but the vast majority of chiropractic claims appear to be nothing more than marketing (and bad marketing at that).

    Unfortunately, there’s so much misinformation out there, it’s hard to sift — is there a good and well-referenced starting point for data on chiropractic effectiveness?

    I have a similar query on acupuncture. There is no literature I’ve been able to find that explains the physical mechanism by which acupuncture is purported to work, etc. However, when I was younger my parents convinced me to try acupuncture for acute neck pain I had at the time — and it seemed to be effective.

    Not having a well-developed skeptical method at the time, I didn’t pursue it or, really, give it much thought at all. In retrospect, though, I’m wondering if there is some explanation.

    Do you know where I could find some information on whether acupuncture has *any* validity, and if not, what mechanisms explain the relief some (including me) appear to experience? The only thing I could think of was psycho-somatic effects, but I know so little about this field that it’s a stab in the dark.

    Thank you.

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