Buying Health Insurance: A Pig in a Poke

By Michael Gorback, M.D., board-certified in Anesthesiology and Pain Medicine. He taught for 8 years at Duke University and is the author of 32 scientific articles and textbook chapters, and one medical book. Dr. Gorback currently practices pain management at the Center for Pain Relief in Houston, TX, and claims that nobody has ever suffered due to lack of knowledge of his opinion. Cross posted from Testosterone Pit

I recently called my pharmacy to refill my blood pressure medication. I have taken this medication for years with good control and no side effects. There has never been a problem with refills other than my family doctor insisting that 5 years really is too long to go without being seen by him.

Until now.

This time the pharmacy called to inform me that the prescription would require “pre-authorization” – an interesting term that I can’t really distinguish from plain old “authorization.” I suppose there is post-authorization, in the form of “it’s better to ask forgiveness than permission,” but this rarely works with insurance companies. Actually it doesn’t work at all when someone is looking for an excuse not to pay for something.

I asked the pharmacy to forward the request to my family doctor, along with a picture of me so he would remember what I look like. Eventually my doctor’s office called and said they couldn’t get the medication pre-authorized and they prescribed another, similar medication that was ok with my insurance company. The difference between these two drugs was the cost. The insurance company, after years of paying for my medication, simply changed the rules and forced me to get another drug that cost less. The alternative was to pay full freight at about $170/month because they wouldn’t cover it at all.

The point of this exercise is not that there were cheaper drugs available that had the same pharmacologic action (a topic for another day) but that my insurer could change the rules without my knowledge or approval.

As it turns out, when you purchase a health insurance policy, you only think you know what you’re buying. You know parameters such as the deductible, coinsurance, premium, maximum out of pocket, and so on. You know whether or not you have maternity coverage, psychiatry coverage, a lifetime cap – and all sorts of nonspecific things.

But the devil doesn’t lurk in nonspecific things, does he? Your policy documents don’t specifically say that certain drugs aren’t covered, or that you might have to try one or more other drugs before they will cover it, or they might refuse to cover it because your condition is not listed as an FDA-approved use for the drug.

One of my colleagues relates an amusing story about this hypocritical farce. He prescribed pregabalin for a patient. The insurer denied it. He spoke with a doctor at the insurance company, who said they wouldn’t cover pregabalin because it wasn’t FDA-approved for that condition. He said they would cover a very similar drug called gabapentin. Gabapentin is cheaper than pregabalin. My colleague then observed that gabapentin wasn’t FDA-approved for that condition either. Upon which the insurance company authorized pregabalin. Or was it pre-authorized?

When it comes to hospital services you might know that they will pay for 60% of charges after the deductible is met, but what you don’t know is what rates they have contracted with providers of healthcare services. Suppose your insurer has negotiated a price of $1,000 for your surgery with the XYZ hospital chain. Another company might have negotiated $800.

Or maybe you had a stroke and now your arm is paralyzed and you need intensive physical and occupational therapy to learn how to do simple things like dress yourself or bathe, and try to recover whatever function can be salvaged. That’s when you learn what type of therapy is covered, how many sessions, and what your out of pocket will be. Most people have no idea how much PT or occupational rehab costs. It isn’t cheap.

There is no way you can know any of this when you sign your contract. Even if you could, they can change it whenever they feel like it, just like they did to me. One year they might pay for a certain treatment, the next year they might decide there’s not enough evidence and your coverage is gone.

You have to use your policy if you want to find out what’s in it.

Also by Michael Gorback, M.D.: Confused and outraged by the prices, often unknown upfront, that you and your insurance company pay for medical services? You’re not the only one. Enter the bizarre world of “Place of Service” pricing. Read…. Doctor: The Sheer Insanity of What You Pay For Medical Services

Print Friendly, PDF & Email


  1. DakotabornKansan

    When you use your policy, even if you know what’s in it, it still may not be good enough.

    My son had Duchenne’s muscular dystrophy.

    He was a junior honor student in high school. His favorite subjects were math, history, and photography. One of his photographs won an award in an area photography contest. He planned to attend the University of Kansas. He dealt not only with the losses associated with the progression of his neuromuscular disease, but also the loss of his mother. He faced all this with remarkable grace. The challenge for him, and for me as his caregiver, was to prevent the inevitable minor cold from turning into another catastrophic event for our family.

    Pulmonary function tests indicated that he had significant under-expansion of his chest and lungs with a peak cough flow of 130 liters per minute. Individuals with a peak cough flow rate below 270 liters per minute are at a very high risk for acute respiratory failure, particularly with chest colds.

    Aggressive preventative intervention at home, rather than subsequent crisis and extremely costly hospital intervention, is what I requested for my son. Obviously, he lacked the muscle strength to cough effectively to remove secretions from his lungs, so he was at very high risk of developing mucus plugging, pneumonia, and acute respiratory failure with every chest cold.

    His doctor prescribed an assistive cough device for home preventative treatment.

    My employer’s health insurance denied it.

    I appealed their decision to deny coverage for the cough assistive device.

    My health plan paid benefits for services that are medically necessary. The plan required that certain criteria be met in order to be considered medically necessary. In my appeal letter I addressed those criteria listed in the summary of benefits under my plan:

    • The equipment must be consistent with the diagnosis. I enclosed the letter of medical necessity for the cough assist device from my son’s physician, citing the medical criteria for implementing this device is when a patient is unable to generate a sufficient unassisted cough flow rate of greater than 270 liters per minute to clear lung secretions.

    • The equipment must meet quality medical practice standards. I attached articles and medical literature references of published physicians and their successes with this device, documenting the cough assist device as a proven technology that had been accepted as a noninvasive alternative for clearing airway secretions in neuromuscular diseases.

    • The equipment must be recognized as an accepted medical practice and have received the required federal approval. I enclosed the Respironics information that gave the Medicare code for the Cough Assist machine… Mechanical In-exsufflation devices such as the CoughAssist are coded under HCPCS code E0482, cough simulating device, alternate positive and negative airways and the list of the conditions for which the Cough Assist is approved, including the ICD- 9 code of 359.1 for “Hereditary Progressive Muscular Dystrophy.”

    • The equipment must be the most appropriate level of service. I provided information that there was only one cough assist device made. All other devices and therapies available for chest physiotherapy presume normal strength and a normal ability to raise lung secretions. All these techniques may help loosen the lung secretions, but only the cough assist device helped in coughing them out. Unless provided with the cough assist device to help him expand his lungs to slow the progression of the pulmonary component of the disease process and to help clear the secretions from his lungs, my son would develop pneumonia and acute respiratory failure and die.

    I also included a listing of insurance companies across the country that were covering the Cough Assist.

    I received the denial of my appeal. The stated reason: “Experimental or Investigational treatments, procedures, devices, or drugs are those that the Plan Administrator has determined: (1) have not been approved by the U.S. Food and Drug Administration as required by law; (2.) through reliable evidence are the subject of ongoing clinical trials (phase I II, or III) or under study related to dosage, toxicity, safety, and efficacy or efficacy related to standard means of treatment; or (3) there is evidence that the consensus of opinion among experts regarding the treatment, procedure, device or drug is that further clinical trials are needed to determine its efficacy as compared to standard means of treatment of diagnosis. Therefore in accord with the terms of your benefit plan, the proposed services cannot be recommended as medically necessary because: The procedure and/or service is considered experimental and/or investigational and research and/or studies do not support the effectiveness, safety and/or value of this intervention.”

    Having recently lost my wife to cancer, it was unbearable to lose my son prematurely because of the shortsightedness and intransigence of that [expletive deleted] health insurance company.

  2. John

    It is no surprise the salaries of the CEOs of large health care insurance companies are always on the rise. Every place they can wring out more savings for themselves at the expense of their clients, up their compensation goes.

    Unfortunately, there is no market based health care system in place for Americans so they will continue to get bad outcomes. Every segment — insurers, hospitals, pharma, health care professionals, etc — are set up in way so that each get as much money as they can — based on greed based principles.

    Americans that must pay large out of pocket expenses for health care should strongly consider heading to other countries for care.

    1. Benedict@Large

      All CEO salaries are excessive and on the rise. The phenomenon is not restricted to health insurance CEOs. In fact, the annual compensation for health insurance CEOs is in the range of $1 per covered individual per year, and is hardly a driver in the high cost of health care.

      I agree that CEO compensation is a major problem, but health insurance CEO compensation as a separate issue is not. We need to focus our efforts on healthcare costs on things that are (such as the lack of any effective overall cost control function, which can only provided by a single payer for all costs).

  3. run75441

    Hi Yves:

    Or your employer/insurance company can decide they wish for you to use mail order rather than pharmacy. If you go to the pharmacy, they will only give you a 30 day supply rather than a 90 day supply. Or they may say if you take the patent version rather than the generic version, you will pay a higher deductible. Insurance companies do have that power to direct you to another med. It can be appealed, if the particular med was absolutely necessary. I did on a particular service rendered to me while hospitalized since I was a captive to my ailment. They paid.

  4. diptherio

    For the benefit of those like myself who have never quite been clear on just what, exactly, “pig in a poke” means. From Wikipedia:

    The idioms ‘pig in a poke’ and ‘sell a pup’ (or ‘buy a pup’) refer to a confidence trick originating in the Late Middle Ages, when meat was scarce, but cats and dogs (puppies) were not.[snip]

    The scheme entailed the sale of a suckling pig in a poke (bag). The bag would actually contain a cat or dog (substantially less valuable as a source of meat), which was sold to the victim in an unopened bag. The French idiom acheter (un) chat en poche (to buy a cat in a bag) refers to an actual sale of this nature, as do many European equivalents, while the English expression refers to the appearance of the trick.

    At least you could eat a dog…or teach it to fetch your slippers or something…

    1. Eric Blood Axe

      Also connected,”Don’t let the cat out of the bag”, instruction to the apprentice. A small poke is a pocket.

  5. PaulArt

    I figured this out in 1997 when my daughter was born with heart defects and had to undergo two heart surgeries to be fixed. I would talk about anecdotal injustices like the one in this article to a lot of people and it was like shouting into the wind. People’s eyes glaze over the moment you start mentioning minutiae like, ‘this Doctor who attended to my daughter while in the ICU was not covered by my PPO’.

    Insurance companies get away with pure murder because it is only a minority of people who get sick and need to use their lousy services. Now lets suppose there was no Medicare and all the 65+ wise Seniors had to use private insurance… that is when it would get interesting, right?

    This train of thought also led me to the conviction that when Truman passed Medicare it was a bad thing, not a good thing for all of us because it was a very very clever move by the Physician lobby to ‘divide and conquer’. It bought off the over +65 crowd, the most politically active bunch and the group that uses medical care the most and left the rest of us like nice fattened Christmas gooses to be picked off one by one.

    This also applies to Social Security. SS was a dumb idea for the whole of Society because it applies the same ‘divide and conquer’ strategy. Again you sequester the 65+ crowd (or 68+ after Asshole Alan Blue Ribbon Commission) and completely neuter any political activity fiddling with future beneficiaries. Like I always say, did you see grand processions on the mall in Washington DC led by active Seniors fighting to keep the qualifying age to 65? Nope. The sentiment was, ‘screw my son, screw my daughter, screw my grandkids’.

    We need to think past this age based benefits nonsense and move to income support for all people based on need. As Clint said ‘deserve’s got nothing to do with it’.

    1. brook trout

      Ah, poor Lyndon Johnson. I thought history would be kinder to the man, but I see now he’s not even getting the credit in some minds for the things that he did do well (such as the passage of Medicare during his administration).

    2. Propertius

      when Truman passed Medicare it was a bad thing,

      Medicare was passed by LBJ, not by Truman.

  6. david

    I bought a health insurance policy through, and now I can’t cancel it. I’ve been trying for two months–they say they’ve lost my application, or they deleted the application when I called them to cancel but didn’t for some reason forward the authorization to cancel to the insurance company, and there is no “policy” for dealing with cases like this, or various other excuses. I think my only recourse is through the state board of insurance, to try to force the insurance company to cancel, although they say they can’t without officially being notified by that it is cancelled. I’m beginning to think they are making it hard to cancel so the numbers of enrollees don’t go down.

  7. mellon

    I think this is a potential point which should be argued, in a mythical country, where it could represent an escape route from bipartisan hell.

  8. Katniss Everdeen

    So, let’s see. It is June, 2014 and, after 3 years of “discussion,” all Americans have been ordered to purchase “healthcare” insurance under the guise of “sweeping healthcare reform.”

    And Michael Gorback, M.D., “board-certified” physician, medical educator and “scientific” author is just NOW figuring out how “healthcare” insurance works????

    How many more decades will it be before he “understands” the ramifications of narrow networks, lopsided physician distribution, policy “coverage” discrepancies, unaffordable deductibles, annual subsidy clawbacks, medical bankruptcies, probate claims for Medicaid reimbursement and capricious, inconsistent interpretation of policy “promises,” to name a few.

    Not to mention the relentlessly increasing share of national income, such as it is, that his “industry” continues to demand in return for its sub-standard “performance.”

    On the trajectory of “healthcare” insurance education and comprehension, it would appear that Dr. Gorback has just entered pre-K. He should be embarrassed to claim authorship of this piece, which demonstrates such a low level of understanding of a system to which he has, apparently, devoted his life. And, presumably, profited considerably from.

    1. Propertius

      Most physicians I know have been complaining about narrow networks, arcane paperwork, arbitrary care denials, and other “features” of the American health insurance “system” for decades. One of the biggest complaints I’ve heard from them about this “system” is that it requires practitioners to spend so much of their time jumping through hoops for insurance companies that they have less and less time available to care for patients. Those who are in small, private practices have the added delight of trying to obtain coverage for themselves and their own employees, just like the owners of any other small business. A physician’s training doesn’t equip him or her to deal with the con artists who run health insurance companies any better than a welder’s, plumber’s, or carpenter’s training does. Why would you expect it to?

      1. PrairieRose

        There was an activist group called “Mad As Hell Doctors” who were traversing the country a few years ago trying to warn folks about the perils of the ACA. Naturally they received very little, if any, media coverage. One would have thought they’d have been a force to deal with, but not in this Free Market. /sarcasm off/

  9. impermanence

    This has been going on for well over thirty years now.

    Private health insurance is scam, simply another way to extort money, invest it, and skim off the profits, that is, banking. Real insurance is completely social in nature, spreading the risk out among the [ideally, the entire] population.

    Regardless, it is a flawed concept because of the costs involved. No more can you afford to rebuilt everybody’s automobile engine [because they failed to change their oil], can you afford to fix the population’s broken down bodies because they failed to insure proper maintenance.

    Again and again, you hear people tell all the sad stories about this health care system, but few have the courage to face up to the reality of the situation, that there is no way to avoid our natural life cycle.

    A good life can not be measured in time any more than can one be measured in currency units.

    1. Benedict@Large

      Nonsense. The quantity of healthcare available is being artificially restricted, driving costs through the roof. Building more schools is one of many things we can do to fix that. We simply need the knowledge and the will.

    2. ambrit

      Dear impermanence;
      Your argument fails on the issue of limits. Every ones’ auto engine can be rebuilt or replaced regularly, if the society has the will to do it. The money will be found, or simply spent into existence. Japan does this by mandating very strict emissions standards, scrupulously enforced. I’ve known several people who bought good serviceable second hand engines for their Japanese autos by purchasing engines exported from Japan out of the pool of “replaced” engines. Japan decided that clean air was something they were willing to pay for. Cars are probably more expensive to own and run in the Home Islands, but that is the price you pay for clean air in Osaka. (They also get a boost for mass transit that way.) [Input from present or past dwellers in Japan appreciated.] My point being that political and or societal will is the determining factor.
      Finally, while I cannot argue with “..there is no way to avoid our natural life cycle,” I must observe that the promise of modern medicine was that lifespans and quality of life would be extended and improved. These laudable goals are entirely possible, if the will to carry through with the concomitant improvements exists. To achieve these secondary goals, the resources now being misused and wasted by the parasite classes have to be seized and repurposed. The last two hundred years have seen a gigantic revolution in the physical and medical sciences. Now we have to carry through with the social and political revolutions that the scientific one has made necessary.

  10. Middle Seaman

    One of the major drawbacks of Obamacare left the insurance company in absolute control of most of health care. The health insurance companies not only decide which medication we can take, but still charge an arm and leg for it, dictate which providers/hospitals one can use, increase cost annually and in some cases even mandate medical test one is subjected to, and pays for, to qualify for more expensive procedures.

    For those of us who had health insurance before Obamacare the only change we see is a substantial cost increase.

      1. ambrit

        More of a Superbug. (I can see the late night movie ad now; “The Policy That Ate My Liver!!!!”)

  11. Don Levit

    Dr. Gorback.
    I live in Sugar and, TX.
    You may be interested to know that we met with the Texas Dept. of Insurance this week for the second time.
    We expect approval as a life and health insurer in July.
    We will be providing a patented product, Health Matching Insurance, to self funded employers of 200 employees or more.
    Premiums are estimated to decrease over time, 60-98%, including medical inflation.
    Meeting with the TDI was our Milliman actuary. We have been working with Milliman to craft our product over the last 3 years.
    Get in touch with me at if you wish to learn more details.
    Don Levit,CLU,ChFC
    Treasurer of National Prosperity Life and Health

  12. Crazy Horse

    1—The purpose of a health care system is to help people avoid getting sick and to assist them to get well when they do become ill. See Canada, Colombia, Cuba & Costa Rica just to use one letter of the alphabet.

    2—The purpose of the American medical system is to maximize the salaries and bonuses of the corporate officers while keeping the ruling class stock owners fat and happy.

    3— The purpose of private medical insurance is maximize profits. It can do so in three ways: a) Charge the maximum premium that the victims will pay. b) Avoid paying for services whenever possible. c) Bribe the government to make private insurance mandatory.. Sound familiar?

    For category #2 & #3 the USA is Number One, true to the spirit of American Exceptionalism.
    For category #1 it ranks #37— truly Exceptional among industrialized nations.

    What more do you need to know about ObamaCare, BuffetCare, Romneycare, BlueCrosscare and all the other criminal medical extortion schemes? Well, one more thing. How to fix it!

    We are told that the reason medical business CEOs have risen to their positions of power is through their superior intelligence and knowledge of health care. Let them prove it. Dick Cheney assures us that waterboarding isn’t torture and the information gained through its use is immensely valuable.. So why not put all the CEOs of our failed health care system and medical insurance companies in solitary cells with a ThinkPad and waterboard all of them once a week until they come up with a system for the rest of us that actually provides heath care rather than bankruptcy? Let the people decide which system they want, and give the CEO who invents it all his wealth back. Send the rest of them into the general prison population to explore their gender potentialities.

  13. ambrit

    Here in Mississippi, the ACA enforced people have exactly two companies to choose from, and they overlap in only four out of eighty two counties. So, there is de facto monopoly pricing in seventy eight counties! No surprise then that the poorest state in the Union has the fourth highest rates. (In my area, the largest hospital physician axis of profit is just now getting serious with the lone insurer about accepting the ACA plans.) The previously dominant insurer here, Blue Cross decided to wait it out. They said they will wait to see if the ACA system proves itself out before they show any interest. A perverse logic has arisen to bedevil the poor (literally so) health insurance “consumer.” The previous lower cost insurers hang back and let the more expensive ones set the rules of the game. Then, citing “business dynamics” the previously lower cost providers raise their rates to the new “market rates.” Great work if you can get it!
    Remember the old Weather Underground? Here’s to the new Healthcare Underground!

Comments are closed.