A recent news story about a Vietnam veteran in Colorado (currently battling cancer) who temporarily lost his health insurance over a two cent shortfall in his premium payment has stirred up a lot of angst on the internet. Happily, Ron Flanagan’s health insurance was reinstated once the story reached the media.
This is not the first time that an error of a few pennies has resulted in a lapse in health insurance coverage. Another Colorado resident (also fighting cancer) found herself in a similar situation last year over a one-cent discrepancy in her premium payment.
In both of these cases, the premiums were being processed by benefits administration companies (Ceridian and Discovery Benefits), rather than directly through health insurance carriers. And in both cases, the coverage was eventually reinstated, but not without much mental anguish for the policy holders who were dealing with serious illnesses at the time that their coverage lapsed.
Although it’s natural to read stories like this and feel angered, there’s another important take-away point here: Automatic payment of health insurance premiums is a very smart way to go. Just about every health insurance carrier now offers automated payments, with the premiums either drafted directly from your bank account each month, or charged to your credit card.
If you sign up for automated payments, there’s nothing to remember. You don’t have to worry about your health insurance lapsing because a bill didn’t arrive, or because you forgot to send in a check. You don’t have to worry about making a typo or accidentally sending an underpayment. And in some cases, it’s less expensive to have automated payments set up too – some carriers charge an additional fee if you opt to receive a bill and mail a check for your premium.