Outsourcing Customer Service Lowers Costs, but is it Healthy for Health Insurance Consumers?

“Outsourcing” – we have all become familiar with the term, in fact some of you who are on these pages looking for affordable medical insurance, may be here because you have been a victim of outsourcing. Many companies “outsource” departments such as accounting and more often Customer Service to save money. Outsourcing as a practice has drawn fire because of the loss of jobs it can cause.

Now like many other businesses, some of the big names in the health insurance industry have chosen to outsource Customer Service, in some cases out of the country. Critics believe this is a practice that may not be so healthy for the health insurance consumer.

Yet insurance companies claim the move helps them deliver health insurance and health insurance services more efficiently, which in turn allows them to provide lower cost medical insurance to the consumer.

Case in point Wellpoint of Virginia. The company currently finds itself in a battle with state regulators who are being asked by a consortium of doctors, dentists and medical associations to create legislation which will not to allow Wellpoint to move its customer service operations out of the state, or even overseas. Intrinsic to the debate, The State Insurance Commission allowed Wellpoint to purchase Trigon Healthcare in 2002 and merge it with its company Anthem Heath Plans of Virginia under stipulation that it not move any of its processing or administration offices out of Virginia. Wellpoint wants the stipulation removed claiming it is outdated in today’s marketplace.

Doctors meanwhile claim that moving health insurance customer service or administration out of state, or worse yet overseas, will result in worse care for patients. Doctors throughout the state testified before the insurance commission that Anthem has traditionally provided the best customer service in the state because of the personal relationships doctors have been able to develop with customer service reps in the state. Physicians know just who to call in the event of a dispute, and they get these disputes resolved quickly for the benefit of the patients.

A company spokesman for Wellpoint said the bottom line is that moving customer service out of the state saves money, and those cost savings can be passed on in lower health insurance premiums. Wellpoint says however it has no current plans to move any operations outside of Virginia should the State rule in its favor and overrule the 2002 stipulation.

In other states Wellpoint already directs some health insurance services, such as medical coverage verification to call centers in Jamaica, Argentina, and the Philippines.