Health Insurance Issues: It's Not Always Time to Call a Lawyer, but Sometimes It Is

It’s as American as apple pie: A company doesn’t come through as anticipated, so you threaten to sue. But can you take your insurance company to court when it denies your medical claim or request for healthcare? The not-so-simple answer: It depends.

Outside TV courtroom dramas, few lawyers will sue health insurance carriers until there have been substantial damages. An attorney, however, can still help. Many offer free consultations, or will meet with you initially at a reduced fee. If they take your case, most will bill by the hour -- an expense that should be considered against the cost of the healthcare you need.

Keep in mind that no attorney can guarantee you’ll prevail. On the other hand, speaking with one early in the process may give you insights protecting your rights, or even preserving evidence in case you are pushed to file a lawsuit.

As Los Angeles attorney Michael L. Cohen, who specializes in insurance and bad faith claims, put it, “The problem is most people are at a disadvantage because they can’t afford to pay lawyer’s fees and the carrier has all the power.”

Insurance policies not only lay out the healthcare you can receive but also restrict how it’s provided. That includes which doctors you can see, what procedures you can have, and what medications are covered. Decisions are not always based on your personal needs or the latest medical practices, but on broad medical standards, statistics, and economic analyses. Exceptions can be made, but you might need to fight for them.

“They go to great lengths to create guidelines to benefit the company,” Cohen said. “It’s like casinos. They stack the house knowing that they’re taking your money and most of the time they won’t have to pay out.”

As a result, you might need help reading the fine print of your policy. Don’t hesitate to ask your carrier for guidance in making sense of the jargon. Most states also have insurance regulatory and oversight agencies that can offer additional support if you decide to appeal a denial or are considering stronger action.

The Patient Protection and Affordable Care Act, more commonly known as the ACA or Obamacare, gives policyholders the right to appeal denied claims at no cost to them. You do not need a lawyer for this process, but having one may help.

So when should you call a lawyer? That depends on your budget and end-goal.

Having a lawyer who specializes in insurance law can help you exercise your rights from the get-go. Lawyers already know the contractual language, rules and procedures, and relevant regulatory agencies. They are better able to identify when your insurer is violating its own policy, when a policy does not align with state regulations, and when generic policy restrictions are preventing you from receiving the healthcare you need.

Circumstances that may warrant hiring an attorney include more complex appeals, such as advocating for coverage of high-cost, brand-name medication when generic medication is not available, coverage of proven or promising treatment deemed “experimental,” or establishing that care is essential, when insurance algorithms claim it is not.

They may be less useful in situations that involve missed deadlines, seeking non-urgent care outside of your preferred network without pre-authorization, and other situations that involve a clear failure to meet policy mandates.

Cohen suggests starting with a discussion about how to achieve your goals as inexpensively as possible and without being unnecessarily adversarial.

For instance, he had a client who needed a heart transplant. He wanted the procedure done at one hospital, his insurer insisted on another. Staying behind the scenes, Cohen walked him through the appeal, helping secure a cost estimate from his preferred hospital and laying out the reasoning for him. The client got his transplant where he wanted.

Had he instead contacted the insurer using legal letterhead, Cohen added, it would have escalated the matter immediately rather than resolving it quickly. And that’s the ultimate goal: resolution in your favor.

Julie Fenyes is a legal communication consultant and writer based in Santa Monica, Calif.