Good Morning America has a story that illustrates how insurance companies use deny and delay tactics to avoid paying legitimate insurance claims.
In this case, a woman with Stage 4 breast cancer tried to collect disability insurance. But Cigna repeatedly denied Susan Kristoff’s claim for short-term disability.
Cigna said she had not proven a disability. Sick and with bills piled up, Kristoff says she considered something drastic.
"If I wasn’t going to be getting better, I didn’t want to sink the rest of my family, so I spent two days in bed crying and thinking about suicide," she said.
Instead Kristoff hired an attorney. In short order, Cigna reversed course and paid her short-term benefits. Then with her lawyer’s help, she applied for the much more important long-term help.
Several people that GMA interviewed for the story about Kristoff said insurance companies have no incentives to pay claims quickly. In fact, it’s in their best interest to deny and delay claims because many people who have been denied will not pursue things.
When asked about deny-and-delay, an insurance industry spokeswoman skirted the issue.
"I think our community has every incentive to continue to get better and that’s what we strive for," Susan Pisano, a representative of the insurance company trade group America’s Health Insurance Plans, said.
[Reporter] Chris Cuomo asked Pisano, "What is the incentive for the insurance company to do things quickly when there is no penalty for doing things slowly?"
"Well, you set up punitive damages as the sort of holy grail," Pisano replied.
Cuomo pointed out that punitive damages were set up to encourage companies not to delay coverage, knowing that there could be stiff financial penalties down the road.
"And I think that the people who wrote the law said they weren’t gonna do that because they wanted to be encouraging employers to offer these benefits and they did not want to build in a costly and protracted, you know, court situation," responded Pisano.