Bill Would Make Insurance Clients Harder to Drop
As in any election year, "issues" are at the forefront of the minds of many Americans in 2008. One of the major issues debated by this year's would-be political leaders is that of health insurance. And recent legislative action in California suggests that the debates won't end once the ballots have been cast.
SFGate.com reports that Hector De La Torre, a representative in the California House, has proposed a bill that would force insurance providers to get permission from the state's regulators before dropping patients retroactively.
The bill is apparently the latest in a flurry of medical insurance-related activity in California. Sources indicate that, as of January 1st, a new law in CA requires insurance companies to pay for its clients' treatment once clients have been authorized and accepted as members.
Evidently, insurance providers such as Blue Cross of California were criticized for their alleged practice of finding reasons to pull coverage when clients filed claims. Legally, insurance companies are not required to cover a client if that client lied on his application form.
But, according to reports, certain insurance companies were in the habit of citing minor discrepancies and accidental omissions as grounds for denying coverage when patients needed it most. Denial of coverage can mean hefty medical bills, which can lead to serious financial strain and even bankruptcy.
Capitol Weekly notes that a California appeals court recently ruled that insurers cannot cancel policies unless they can prove that inaccuracies on patients' medical reports are intentional. Basically, insurers have to cover medical claims unless there's proof that a patient purposely lied to get coverage.
While these moves suggest a promising future for De La Torre's bill, other happenings on the medical insurance front point to a real need for the bill's requirements.
According to SFGate.com, Blue Cross of California sent letters to doctors across the state, asking them to indicate any discrepancies between insurance applicants' health surveys and their actual observed conditions. The Gate quotes De La Torre describing the letters as asking doctors to "rat out" their patients to prevent insurers having to pay for treatment.
Sources note that De La Torre has targeted his bill at what he calls the "unfair practices of insurance companies," including the sending of letters as a means of denying coverage to some applicants. Among other things, the bill would require insurance companies to get permission from the state's Department of Managed Health Care before cutting off coverage.
The letters, which reportedly angered doctors across the state, might even violate certain doctor-patient privacy statutes. The DMHC is allegedly investigating the legality of such methods of information collection after receiving several physician complaints.
Though Blue Cross has stopped sending the letters to doctors, sources indicate that regulators have recently fined more than one insurance provider for taking aggressive steps to eliminate patients who have chronic conditions and therefore need lots of medical attention (and cost a lot of money for insurance companies).
Some presidential candidates are promising better health coverage for Americans in hopes of drawing support from voters who have seen how complicated and uncertain private health coverage can be. What actually happens after the votes are counted, though, remains to be seen.