Health Insurers Routinely Deny Claims of Civilian Workers Seriously Injured in Iraq, Afghanistan Wars, According to Los Angeles Times
Civilian contractors injured while serving the U.S. war effort in Iraq and Afghanistan often face delays obtaining or are denied insurance coverage for basic medical care, artificial limbs, psychological counseling and other services, according to a joint investigation by the Times and ProPublica.
Civilian contractors typically perform such tasks as delivering fuel to front-line troops, guarding U.S. diplomats and translating for soldiers during raids. Their insurance program -- handled through the U.S. Department of Labor -- is similar to the workers' compensation programs in which U.S. companies purchase insurance to cover workplace injuries.
According to records, insurance companies initially rejected 44% of claims from civilian workers that involve serious injuries and more than 50% of all claims related to psychological stress. In addition, the insurers protested about half of claims in which an injury resulted in more than four days of lost work, which accounts for about 9,000 of 31,000 total war zone claims. The insurers also protested more than half of post-traumatic stress disorder claims and more than one-third of cases in which a civilian worker was killed. The Times-ProPublica investigation found that the "vast bulk" of approvals were for minor claims. Meanwhile, congressional investigations have found that insurers, including American International Group, have collected more than $1.5 billion in premiums paid by U.S. taxpayers and have earned almost $600 million in profit on the insurance plans.
The Times-ProPublica reports that the high denial rates partly resulted from government rules that allow insurers only 14 days to judge the validity of a claim. According to the Times-ProPublica, insurers often reject claims initially and then later investigate the claims. The majority of the investigations are usually resolved through mediation, which takes between six to seven months on average to resolve, according to the Times-ProPublica. Cases that are unresolved through mediation go to court, where workers win about 75% of the time. However, the injured worker must pay for care out-of-pocket or delay treatment while the case is being contested. Such cases take an average of two years before a final judgment, according to an analysis of court files, the Times-ProPublica reports.
According to Shelby Hallmark, who oversees the civilian insurance program at the Labor Department, there had been a "complete lack of compliance" at the beginning of the Iraq and Afghanistan conflicts. The Justice Department "has shown a reluctance to prosecute such cases, which are misdemeanors," Times-ProPublica reports. "It's not an enforcement kind of program. Enforcement is not the function," Hallmark said.
AIG officials said "the vast majority" of claims are not disputed "when the proper supporting medical evidence has been received." In addition, company officials said that the company has paid 90% of claims without dispute. DOL officials said about 8% of claims in total are contested (Miller/Smith, Los Angeles Times, 4/17).