More Blues for Blues

Thursday, July 17, 2008

The LA Times today reveals that LA City Attorney Rocky Delgadillo is suing Blue Shield (for once, we're not picking on Blue Cross) for rescissions.

The featured story is this poor Portuguese couple, left with $60,000 in medical bills after Blue Shield retroactively cancelled their coverage. The insurer scrutinized the family's applications after the wife needed emergency surgery to remove her gall bladder. They couldn't find anything wrong with her application, so they mined her husband's application and VOILA -- he had a high cholesterol reading he had not disclosed: cancel!

Turns out, the poor man didn't even *realize* he had high cholesterol. He took Lipitor, but he was told by his doctor that "men his age often needed it.'' He doesn't speak English well. The agent filled out the application for them.

I always get nervous when I read these stories because it helps to illustrate exactly how vulnerable each and every one of us really is. This story, though, particularly touching because I have immigrant parents and my immigrant mother misunderstands things all the time -- *ALL* the time. She doesn't get jokes, and she can't tell stories without getting at least three facts wrong.

So, if she were ever at the mercy of the individual insurance market (if the myriad pre-existing conditions she and my father have don't already disqualify them from coverage), I would be reading about her rescinded coverage in the LA Times. Thank God for the retiree health care she has -- for now.....

Labels: Insurers, InTheNews, Rescissions

posted by Hanh Kim Quach | Permalink | 11:07 AM


 

Evidence for Reform

Thursday, June 12, 2008

A national report released today confirms what many health advocates already knew: California's individual health insurance market is a big mess.

The individual market is where consumers to go buy health insurance if you don't get it at work (where you have a group going in to buy coverage together and spreading out the risks) or through public programs.

California's feeble -- or lack -- of protections leaves consumers extremely exposed. Here's how we fared:

• Requiring insurers to sell coverage to all applicants (also called guaranteed issue): No Credit.
• Requiring affordable coverage alternatives for uninsureables -- people with pre-existing conditions: Partial Credit. (California has the Managed Risk Medical Insurance Program, which allows this population to buy coverage at above-market rates. Without this program, these consumers would be denied coverage. MRMIP, however, is unable to accommodate all who need coverage. They do not advertise, yet have 8,101 enrollees and 339 applicants on a waiting list.)
• Prohibiting higher premiums based on health status: No Credit.
• Requiring advanced review of proposed premium rates: No Credit.
• Requiring insurers to spend at least 75% of premiums on health care: No Credit. (Actually, HMOs in California are required to spend at least 85% of premiums on health care. PPOs, which are regulated by a different department, are required to spend 70% of premiums on health care, though some insurance products spend as little as 51% on health care)
• Limiting how long coverage can exclude pre-existing conditions: Partial Credit.
• Limiting look-back period: Partial Credit
• Using objective standard to define pre-existing conditions: Full Credit (the first!)
• Requiring medical underwriting to be completed during application: Full Credit (We're not completely convinced this is the case -- otherwise, why the need for some insurers to rescind insurance later?)
• Reviewing insurers' requests to revoke coverage: No Credit (The Department of Managed Health Care Services has restored coverage to more than 1,000 patients and is in the process of reviewing more than 5,000 cases where patients have had their insurance revoked since 2004. )
• Accepting appeals when coverage is revoked: Full Credit
• Reviewing denials for all state-licened carriers: Full Credit
• Making external reviewer decisions binding: Full Credit
• Offering free external reviews regardless of claim size: Full Credit

Pretty sad. But there's hope! Fortunately, we're actually trying to do something about our abysmal performance.

• SB 1522 (Steinberg) INSURANCE MARKET STANDARDS & PREVENTING "JUNK" INSURANCE. The bill would set a minimum benefit standard for coverage, and weed out "junk" insurance that still leaves people exposed to bankruptcy. It would require coverage to have an overall cap on out-of-pocket costs, and cover doctor, hospital, and preventative care. It would sort health insurance policies into five coverage categories, ranging from “comprehensive’’ to “catastrophic.’’ Organization of plans into these categories would enable consumers to better track premium, benefits and cost-sharing, and assist consumers in making apples-to-apples comparisons between plans.
• SB 1440 (Kuehl) CAPPING ADMINISTRATION AND PROFIT. It would set a minimum medical loss ratio – requiring every insurer to spend at least 85 percent of premiums on patient care.
• AB 1945 (De La Torre) INDEPENDENT REVIEW OF RESCISSIONS. It would require health plans to seek approval by an independent review panel under the Department of Managed Health Care or Department of Insurance for each individual rescission. It would also standard the process and questions used in any underwriting. Also up in the Assembly is AB 2549 (Hayashi) that would impose a six-month time limit in which insurers have to rescind individual health care policies once consumers’ applications are approved.

Labels: GuaranteedIssue, Insurers, Legislation, Rescissions, Research, YearOfReform

posted by Hanh Kim Quach | Permalink | 11:49 AM


 

Over a thousand patients reinstated...

Thursday, May 15, 2008

Major news today from Los Angeles, where the Department of Managed Health Care (DMHC) announced settlement agreements with Kaiser Permanente and HealthNet to automatically restore coverage to over 1200 patients who had their coverage rescinded.

Lisa Girion of the Los Angeles Times, who's been on this story like a hawk, has an early story.

Here's the Department of Managed Health Care's press release and text of the actual settlements with the two insurers. Kaiser had the bulk of the rescissions--over 1,000, even though they stopped the practice two years ago. The real question now is whether the other leaders in the individual market--Blue Shield, and especially Blue Cross, will also come to terms.

A few weeks ago, consumer advocates stood with the DMHC Director Cindy Ehnes when they announced that all of the 5,000+ people who had their coverage retroactively rescinded since 2004 would be provided an independent review process so that they can get their past treatments paid for, get appropriate restitution, and get reinstated for coverage going forward.

These settlements go beyond that, in getting the plans to reinstate the patients without the uncertainty and administrative hassle of a review, and with the agreement not to challenge the reinstatement in court--something that some plans were threatening.

We appreciate the Department's focus on getting people their care and coverage first and foremost. We are pleased that over a thousand patients will get reinstated without further procedural barriers and heartache. The patients will appropriately be made whole for the expenses they have had to bear, but also ensured coverage so that are not left alone and abandoned, uninsured and uninsurable because of their so-called pre-existing conditions.

And while we think the fines don't match the scale of the insurer's wrongdoing, the priority is to make the patients whole, and to make sure they have coverage. We appreciate the focus on back-end enforcement of this settlement and the possibility of much steeper fines, and hope the Department adopts a 'zero-tolerance' policy for further bad behavior by these insurers.

Thousands of other patients are waiting to see if their health plan will agree to a settlement, or if they will have to go to a more cumbersome process to get coverage, either through the Department or in court. It's sad that after all the attention on this reprehensible practice by insurers, we don't have the entire industry seeking to make this right.

Labels: DMHC, Insurers, Rescissions

posted by Anthony Wright | Permalink | 8:43 PM


 

More on rescissions

Friday, April 18, 2008

I wanted to follow up on Anthony's post with some more details about what Gov. Schwarzenegger's administration has laid out as his goals, this year, to tackle the rescission problem.

A quick recap: The state ordered the immediate reinstatement of health coverage for 26 enrollees who had their health policies retroactively cancelled in the past four years by Kaiser, Blue Cross or Blue Shield. Thousands more policies of consumers insured by the three named insurers, Health Net and Pacificare, could also be reinstated after review by an independent arbiter. These retroactive cancellations typically occured after a consumer started using lots of expensive health services -- triggering a second and very, very close look at their application by insurers.

As the system is now, said Daniel Zingale, one of the governor's health policy advisors, "If you use it, you lose it,'' of health coverage. To change this, the governor is supporting the following guidelines and principles to protect consumers:

1) A clear application process, which could help prevent mistakes and omissions
2) If there is no evidence of "willful misrepresentation,'' a policy cannot be rescinded
3) Plans must give adequate notice to consumers about the fact that they are investigating their applications. There would also be an established appeals process for consumers.
4) A prohibition on bonuses, quotas and other incentives for insurance company employees to rescind.

Of course, Zingale pointed out -- and we wholeheartedly agree -- this would all be moot had we passed ABx1 1. With health reform, we would have:

• Guaranteed issue: everyone receives coverage, regardless of pre-existing conditions,
• Guaranteed that everyone was paying into the system so insurers didn't go nuts about NOT being able exclude the really sick and expensive people,
• And guaranteed affordable health coverage and/or subsidies to purchase health coverage for 4 million Californians.

In the absence of that, though, this is a great place to focus reforms that would begin to help consumers feel more secure about the coverage they have.

Labels: BlueCross, Insurers, InTheNews, Rescissions, Sacramento

posted by Hanh Kim Quach | Permalink | 1:18 PM


 

Key bills move to the next step...

 

Dealing with ER overcrowding...

 

Another reason to pick on HSAs ...

 

This is interesting...

 

Flurry of activity in Appropriations and the rest ...

 

Some movement?

 

Back in session...

 

Making coverage matter...

 

Stop the cuts, or we'll all pay the price...

 

Balancing act...