VOICE Speaks Out Over Insurance Abuse : Consumers: It’s not just the denial of coverage that has people calling for change. They say health insurers have too much control over their lives.

Like any loving, dutiful daughter, Marian Miller was prepared to oversee the care of her elderly parents when they became ill a few years ago. But the Redondo Beach woman didn’t anticipate having to take on the insurance industry on their behalf.

Miller, 43, not only waged war against an insurance company that denied her parents’ medical claims, she founded a nonprofit organization to encourage consumers to fight back when they feel they’ve been wronged.

Victims of Insurance Company Errors (VOICE) is one of the few organizations seeking to educate and advise consumers on health insurance matters. (The group also has a lobbying arm in Washington.) As health-care costs rise and insurance restrictions tighten, Miller says, there is more need than ever for consumers to be wise and wary.

That’s what she learned when her parents’ insurer began to deny what the family believed were valid claims.

“This is not just about denying insurance coverage,” says Miller, a pleasant, soft-spoken mother of two young children. “This is about crushing the human spirit. We have to deal with health problems--that’s something we can’t control. But it’s having to deal with this other force--the insurer--also controlling you that’s so hard. My mother lost her will to live because of it.”

After years of ailing health, Miller’s parents needed care in a nursing home. Miller, her parents and the family doctor reviewed the couple’s insurance policy and agreed it would cover such costs.

But their claims were repeatedly denied. The couple had to rely on their savings to pay for their medical care while Miller fought the insurance company. Her mother died during the battle.

“I was infuriated,” Miller says. “My parents would say things like, ‘Let’s just hope we die before our money runs out.’ I knew their claims were valid.”

The money did run out, and Miller’s father went on Medicare before Miller filed a lawsuit and settled with the insurer.

But she couldn’t let the matter rest. Miller went on to investigate insurance problems encountered by the elderly, and became convinced that consumers need to unite to argue for their rights.

Most people won’t fight back when they encounter problems with their insurers, she says, and “insurers know that only the most tenacious people will get their claims paid.”

Just how often consumers are wrongfully denied insurance reimbursement is hotly debated. The majority of claims are handled professionally and correctly despite numerous obstacles, says Fred Hunt, president of the Society of Professional Benefit Administrators, a trade organization for self-funded employer insurance plans.

“I’m astounded at how good the service is, frankly,” Hunt says.

He says shoddy claims, incomplete information and missing records often trip up consumers seeking reimbursement. Moreover, many consumers don’t understand what their policy covers.

And, Hunt adds, many consumers, with the aid of their doctors, file claims with false diagnoses to hide a diagnosis that wouldn’t be covered.

The biggest problem, though, is that people don’t know what is covered, he says: “We tend to apply wishful thinking to what we want covered.”

But some consumers tell a different story. Their complaints about insurance companies range from claims of unfair treatment to cases of outright fraud.

Kathleen and Bill Harvey of San Diego had paid into a university alumni group insurance plan for four years before trouble began.

Their oldest daughter, Marissa, required surgery at age 3 because her only kidney was partially blocked. Marissa’s health outlook was good, although the Harveys were told that she should be examined three or four times a year to make sure the kidney functioned properly.

Three months after the surgery, the couple’s insurance premium doubled. Within three years, it doubled several times again--to $16,000 a year.

“I didn’t know much about consumer rights, but I knew I had to do something,” says Kathleen Harvey. “At first, as a victim, you feel sorry for yourself. But then you get angry. The insurance industry has so much money to spend to get attention. I’m worried that there are not enough consumer voices being heard.”

She wrote letters to elected representatives, joined Miller’s organization and ended up testifying in Washington last year about unfair insurance practices.

But their problems were not resolved. The Harveys eventually had to drop all but one of their children from insurance coverage, and Kathleen has gone back to school, hoping to land a better job--with health benefits.

Still, she says: “People shouldn’t have to change their jobs the way I’ve had to.”

The Harvey family is not alone. Federal authorities report that complaints about health insurance coverage have soared in recent years.

And one of the biggest barriers to consumer rights, activists say, is that a long-standing federal law has allowed self-funded employer insurance plans to operate without regulatory oversight and without penalty when consumers’ rights are abused.

The Employee Retirement Income Security Act--better known as ERISA--is a federal law created to protect workers’ pension and health benefits. But when the law was written, it contained no details on how to protect health benefits in employer-funded health plans. Moreover, ERISA preempts any state insurance laws designed to protect consumers.

Since about 85% of Americans get their health insurance through employer plans, ERISA has become a huge barrier to consumer rights, Miller says.

In one infamous case, a Houston man’s employer reduced his health coverage from $1 million to $5,000 after he became ill with AIDS. The employer was reportedly able to avoid a Texas law forbidding such discrimination by claiming that ERISA preempted state law. The U.S. Supreme Court refused to hear the case and the Houston man died.

Hunt, of the Society of Professional Benefit Administrators, says the ERISA law protects the health of the plan itself, and therefore protects policyholders as a whole. But several bills now before Congress would amend ERISA and close its loopholes.

Even with new legislation, consumers who are wrongfully denied coverage need to fight on their own behalf, says Mary Thompson, a Georgia consultant who used to work in the insurance industry.

“Companies have become more and more resistant” to paying questionable or unusual claims or responding to consumer complaints, she says. “You may have to take more steps now. But you can fight them.”

Thompson, author of “The Squeaky Wheel Gets the Grease: A Step by Step Guide to Health Insurance Reimbursement,” says 90% of the people who put up a good fight will come out ahead.

The most common problems are denials for treatment the insurer believes is not medically necessary, or is cosmetic, experimental or investigational.

Claims for conditions or treatments that fall outside the norm are also problematic, Thompson says: “There are certain procedures a claims officer follows, and if the claim falls outside of this it can be denied. What is frustrating for consumers is when they feel their claim is not run-of-the-mill, but it’s handled like it is.”

In these cases, appealing the claim is worthwhile. If it’s a small dollar amount, the insurer may just pay it, she adds.

Computer and human errors may affect as many as 10% of all claims, Thompson says.

Most insurance companies don’t intentionally make errors. But some, she says, “will take a claim that is borderline and instead of seeking more information or giving the consumer the benefit of the doubt, they will just deny it. They may feel the consumer won’t fight it.”

Miller says many people have problems with the “chiseling” of reimbursements in which only part of the claim is paid. Other common problems include long delays for reimbursement and the seemingly capricious denial of small claims.

Whatever the problem, the consumer has to decide whether to fight.

“You have to decide: Is it worth pursuing the $15 that was denied?” Miller asks. “I think every time someone says, ‘It’s not worth it,’ that puts $15 more in the insurer’s pocket.”