It seems like the Mother of all health care horror stories: an unemployed single mom suffering from leukemia almost lost her health insurance because she underpaid her COBRA premium by a penny. It's made the national media, including MSNBC's "Countdown with Keith Olbermann" and the Huffington Post. But there's more to the story than meets the eye.
Larosa Carrington of Colorado Springs, Colo. was treated shabbily by Discovery Benefits, the administrator of her COBRA benefits. Since she never received a bill, the laid-off college admissions counselor was forced to calculate how much she owed on her own. By Carrington's reckoning, she figured that $165.15 was the correct amount and sent the payment to North Dakota-based Discovery Benefits. In response, the company sent her a badly written, legalistic letter saying that "the amount of your payment was not enough to satisfy your initial premium payment ... so your coverage has not been reinstated with your insurance carrier."
The 52-year-old telephoned Discovery Benefits to find out and was stunned when the Discovery representative told her she owed $165.16 and wanted her to send a payment for 1 cent. Carrington says that the representative insisted she pay the shortfall with either a check or money order and there was no way that it could be overlooked. Carrington was incredulous.
"I actually called them from my hospital room, [lying] in my hospital bed," she says. "At that particular moment, I wanted to know how much I was short ... Of course, I was in disbelief when I found out" that the amount due was a single penny.
Carrington says she tried "everything" she could think of, including "ridiculing them and shaming them," to no avail. Her argument was that she could not send a payment because she was undergoing chemotherapy. Another problem Carrington pointed out was that her bank might not cash her check, thinking it was a "mistake." A supervisor was more sympathetic, but still could not help.
"The best she could do for me was keep a 'special eye' out for my payment," she says. "I kept hearing 'that's not our policy.'"
Frustrated with Discovery's stubbornness, Carrington mentioned to the supervisor who called herself "Gina" that she was considering telling her story to the media. Later that day, Gina phoned back to say she had come up with the figure of $161.1545. Carrington had rounded down while the company had rounded up. Discovery then corrected its error and reinstated her coverage. Carrington was so mad that she told her story to the media anyway.
The whole Kafkaesque exercise lasted three hours and was pointless, since the cost of processing a 1-cent check probably would be far more than the value of the payment. If Discovery really wanted that penny, it would have made more sense just to ask for it in the next payment. Technically, Carrington was without insurance and would have received sufficient coverage if she made her payment before the grace period. That's no excuse, though, for how she was treated.
Discovery President John Biewer admits the company made a mistake, which it rectified as soon as it could and has taken steps to prevent it from happening again.
"The letter should not have gone out for only a penny," he says, adding that it was spit out by a software program run by a third-party vendor that has been fixed. Its cold, bureaucratic language was mandated by state insurance laws.
Carrington was inconvenienced for a few hours by the snafu, which gave her -- understandably -- a headache. Media reports also have failed to note that Discovery only collects payments and has no say over who gets insurance and who does not. Carrington says she was not aware of the exact role the company plays and only confronted them because she knew of no other place to go.
"Our motivation is to keep her insured," Biewer says, adding that the company does not make money otherwise. "We're not the evil people everyone thinks we are. We do not pay medical claims. We are just in shock in how this is being portrayed."
Indeed, Olbermann declared Biewer "The Worst Person in the World" on July 7, saying of Discovery, "They'll let you die for one hundredth of a dollar." That refers to the discrepancy between Carrington's and the company's initial calculations. Carrington's story has gone viral, resulting in the morphing of a regrettable error into an evil plot to deny a sick woman life-saving health care.
"They turned our world upside down in 12 hours," Biewer says, adding that he doesn't even know the name of Carrington's insurer. "We are getting a ton of nasty e-mails ... [some] are unsettling but not enough for the police to do anything about them."
After her story appeared in the press, Carrington says she was contacted by many people who battled their insurance companies over trivial amounts of money. "There need to be clear guidelines for people to understand," she says.
Her story has a happy ending. A fund has been set up to help her out. Occasionally, people recognize her as the "penny lady."
Carrington's story, she says, has a simple morale that patients should remember when taking on insurance companies: "Use your voice."
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