If you are visiting from the Carnival of Personal Finance – Halloween 2009 Edition hosted at Money Crashers, welcome to Out of Debt Again! Thank you Erik for including my post in today's carnival!

Back in September I wrote about how Mr. A's insurance company was asking us to reimburse them for prescription medication that they'd paid for, and now have decided he wasn't covered at the time.

I had hoped this update would be simple and the would be all cleared up.   Especially since that's what I'd been told in my first conversation to INSCO*, “There's been some mistake, this will all be taken care of within 2-3 days max.”

The week after we received the notice, I put in a call to INSCO. I was told by a pleasant young woman that for some reason Mr. A had two dates for termination of his policy. One was October 31st, 2008, the other was June 30th, 2008.   I explained to her that first, we had just paid his last COBRA payment in September (2009) so there was no way his insurance expired June 30th, and this was beside the point, since the prescriptions were obtained in November and December and should have been covered.

She did a little bit of looking around and said she would have someone figure out why there was an October termination date, and it would probably be cleared up once they realized the termination date was really June. I didn't bother to reiterate that his insurance didn't expire until September.  She said everything would be fine in 2-3 days max.

Next we received a letter from Mr. A's primary care physician, notifying us that we were liable for $165 since INSCO had retro-terminated Mr. A. So I called INSCO again just to check and make sure everything was all cleared up.

No.  It wasn't cleared up. In fact, it was worse.  They'd discovered Mr. A's coverage was canceled on October 31, 2008.  Sooooooo… we'd been paying COBRA all these months, but his policy was canceled.

The lady I talked to at INSCO sympathized with me, and said she would be furious as well.

Next I called Mr. A's previous employer's insurance department to find out what the heck was going on.  The insurance department assured me that his name was still showing on their paperwork, and he should be covered.  The guy said he would get in touch with the insurance administrator and find out what was going on.

In the meantime, I thought about this problem, and I realized that maybe a mixup had occurred when they canceled AJ's coverage when he turned 19 last year.  I emailed the insurance guy, and he forwarded the information to the insurance admin.

Yesterday I got an email from the insurance administrator, confirming this is indeed what happened. When they canceled AJ, they also canceled Mr. A. She is going to do what it takes to get his insurance retroactively reactivated.

I called the doctor's office and the lady there was very sweet about the whole thing. She explained how frustrating it was for them because the insurance companies can go back as much as one year and retro-terminate people, and then ask for the money back that they've already been paid! She said they had been paid for Mr. A's bill months ago, but had just sent a reimbursement check back to INSCO since they'd retro-terminated Mr. A. She said she would make a note and to just keep her posted.

I expect we'll be getting a lot more bills from this retro-termination mistake on INSCO's part.

It all makes Mr. A just love insurance all the more.  NOT.

*INSCO is short for Insurance Company and a fictitious name to protect the identity of the real insurance company.

Yours Truly,