Insurance Won't Cover Smartphones, When Pricey Alternatives Exist

consonant writes "The NY Times has an article on insurers refusing to cover cheaper devices such as iPhones and netbooks which may be used by the speech-impaired, and instead requires them to acquire devices that cost from 10 to 20 times as much. The reason? 'Insurance is supposed to cover medical devices, and smartphones or PCs can be used for nonmedical purposes, like playing video games or Web browsing.' From the article: 'For the millions of Americans with A.L.S., Down syndrome, autism, strokes and other speech-impairing conditions, the insurance industry's aversion to covering mainstream devices adds to the challenges they face. Advocates say using an everyday device to communicate can ease the stigma and fear of making the adjustment. At the same time, current policies mean that the government and private insurers may be spending unnecessary dollars on specialty machines.'"

Comments

Re:Fraud-bait... tort-bait

[Bigjeff5]

we're more interested in punishing people for wrongdoing than we are in doing what is most beneficial to society.

There is absolutely no motivation for an insurance company to punish anybody for wrongdoing. That only happens when the motive is "bettering society" rather than profit. You end up with some bureaucrat's opinion (or worse, a politician's opinion) of what someone deserves or does not deserve. As insurance companies value profit above virtually everything else, punishment never enters the equation. In this way they can often be more fair in a certain sense than a socialised health system. Where they become unfair is with payment for services, and they are undescriminatorily unfair in this regard.

Fraud may be quantifiable, but that doesn't give you the money back that was stolen via fraud. If someone defrauds you out of $500, you will never see that money again, because it will cost more than $500 to get that money back. That is why insurance companies would rather stick with clunky, expensive devices that only have one function and nobody really wants except those who can't get by without it. It may cost them 20x more, but if they switched to the cheaper device they would be defrauded an order of magnitude more often.

If you don't think it happens, look at how big of a problem prescription drug abuse is. The -only- way to get prescription drugs long after you need them is for a doctor to write you up a prescription, and yet hundreds of thousands of people abuse prescription. Hell my own aunt is one of them, it isn't exactly uncommon. Why do the doctors do it? Because a lot of time they'd rather take a few bucks and write that piece of paper than deal with an upset patient, plus some of them are simply unscrupulous.

And when the object in question is worth less than the cost to pursue the issue, it becomes difficult to prevent the fraud without losing incredible amounts of money. They are better off not paying for the phones for this purpose, since human reaction is quite predictable in these circumstances.