Make Your Insurer Pay

Both of my sons have food allergies. For my oldest, Benjamin, protein is life-threatening. How's that possible, you ask? I've no idea. But I've experienced enough close calls with him to know that's the way it is.

So, we deal. But it gets hard, particularly from a financial standpoint. Ben's only source of protein is an amino acid-based medical food called Neocate that costs us $6,000 annually. At least it used to. No longer.

Our insurance company comes through
For years, we've been appealing to our insurance carrier to help us with the cost of Neocate. Until recently, every effort stalled in a pile of bureaucratic red tape. Now, Ben's allergy doctor prescribes the food, submitting the order directly to our insurer's mail-order pharmacy. We received the last of a three-month supply of Neocate just an hour ago. A bill for a mere fraction of the $1,500 we would have paid should arrive within a week.

The moral? A fortune may be hiding in your insurance policy. So read it, and then do whatever it takes to get your insurer to pay up when there's reasonable evidence it should.

Four steps to appeal a denied claim
Here are four steps you can take if you believe your carrier is treating you unfairly:

  • Take careful notes. Save every form and every letter related to your case. If possible, write down your recollections from calls with the carrier. Then, inform your doctor of everything you learned. He's the expert on the system. Something in what the carrier tells you may provide a clue for how to achieve coverage. For us, it was using the phrase "medical food" in our request. (Give my wife a round of applause for that one.)

  • Know your policy. Make sure you keep your policy information close at hand and study it before you go further in pursuing your claim. You may find multiple options for getting help, such as the mail-order pharmacy we're now working through.

  • Learn how to appeal. Every insurance carrier has an appeals process for denied claims. A representative should be able to provide detailed instructions for how to proceed over the phone, but make sure you get them in writing as well. Remember: UnitedHealth Group (NYSE: UNH  ) , Aetna (NYSE: AET  ) , WellPoint (NYSE: WLP  ) , and other carriers make money by limiting expensive claims. Don't expect them to always be helpful as you seek reimbursement.

  • Go to city hall. Every state has an insurance commissioner, minimum policy requirements, and its own appeals process. Finding your state's department of insurance is easy, thanks to this useful site hosted by the National Association of Insurance Commissioners.

Follow the money
Dealing with food allergies is a burden we share with an estimated 12 million Americans, according to estimates from the Food Allergy and Anaphylaxis Network. For many, it creates a financially draining situation from which insurance companies offer little relief. And thousands of other medical ailments place families at financial risk for exactly the same reason.

In some of these cases, insurers aren't doing what they should. Don't let them get away with it. Challenging them will likely require reams of paperwork and more than a little patience, but the potential gains -- both personal and financial -- are worth the effort.

Interested in more money-saving tips? Motley Fool GreenLight, our new personal finance newsletter service, promises to save or make you at least $450 in every issue. Click here to give it a try free for 30 days.

Fool contributor Tim Beyers marvels at how well his wife handles their sons' food issues. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. Get a peek at everything he's invested in by checking his Fool profile. UnitedHealth Group is a recommendation of both Inside Value and Stock Advisor. The Motley Fool has an ironclad disclosure policy.

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