Imagine the following scenario: You are in need of a serious medical procedure, and after checking with your insurance documentation and finding out the procedure will be covered, you go in for the operation, and it is a success. As you go over your mail later, recovering from your operation, you get a letter from your private health insurance company (or the hospital) stating that the operation was not covered, and you now owe tens of thousands of your own dollars.

You frantically study your insurance paperwork, and can’t find where the insurance company has any legal reason to deny coverage. You call the hospital and the insurance company, and get nowhere.

Unfortunately, this type of thing happens far too often. It can be Insurance Bad Faith, i.e., where an insurance company knowingly and willfully tries to get out of paying for an expensive medical procedure that should be covered. HUGE CAVAET – if this is an ERISA health insurance plan, Arizona’s bad faith law will not help you.

Even more unfortunate, the private health insurer will often get away with it because insurance consumers don’t know that the private health insurance carrier has a duty of good faith and fair dealing under Arizona law. The sad truth, however, is that most insurance companies only speak the language of money, so in order to make your point known, the only real recourse is suing for breach of contract and insurance bad faith.

Some of the more commonly denied conditions by private health insurance companies are fibromyalgia, chronic fatigue, and PTSD (post-traumatic stress disorder). All of these can be seriously limiting on one’s ability to perform work.

Some of the most common ways that private health insurance companies will try to avoid paying owed benefits are as follows:

• The private health insurer will refuse to acknowledge the condition exists;
• The private health insurer will require you to see a specialist picked by the insurance company (who is likely biased in their favor);
• If an individual does not see this specialist (even if they see 6 others), they will deny on grounds of not enough documentation or that the insured failed to cooperate with the insurer’s investigation; and
• The private health insurer will not accept how serious certain conditions can be, and refuse to acknowledge the impact on employment the condition may have.

If you have a talented Insurance Bad Faith attorney on your side, this process can be relatively smooth and less stressful than dealing with the insurance company on your own even if it does take an extremely long time.  Either way, you will want to keep your eye on the insurance company’s claims handling at all times. As the years go by, insurance companies are getting trickier and trickier with how they refuse or delay payment on covered claims.