WOMEN’S POLICY COSTS, COVERAGE WOULD BE AFFECTED
As Congress and President Barack Obama began wading into national health care reform earlier this year, California’s leaders were already embroiled in debate over what they could do on their own turf.
Congress might eventually enact changes that address consumer complaints about being denied insurance coverage or being thrown off individual plans, a practice called rescission.
Federal lawmakers also might get around to outlawing practices that allow some insurers to charge women more because of their gender, or extra to get maternity benefits.
But like other states, California has the power to pass its own laws to provide relief, absent federal solutions.
"It’s critically important we do these things, whether it’s rescission reform or maternity reform at the state level," said Anthony Wright, executive director of Health Access California.
"Things could change with federal reform," he said, "but we can’t wait."
Three key bills that health care advocates lobbied for were approved by the Democratic-controlled state Legislature this year.
But the proposals didn’t garner Republican support, and the insurance industry opposes them.
The bills are on Gov. Arnold Schwarzenegger’s desk, awaiting his signature or veto.
More individual policies More than 2.6 million Californians buy insurance individually rather than through a group, and purchases are growing. Buyers included the self-employed, early retirees, part-timers and young adults who no longer have parental coverage.
One bill stops insurers from charging women more — so-called gender rating — for coverage they buy on the individual market. Ten states already prohibit it.
Another bill requires that all individual policies include maternity benefits. Right now, if a woman wants to add that coverage, it can cost hundreds of dollars a month extra.
The third bill requires insurers to prove to a review panel that individual-market customers "willfully" lied about health histories before policies can be revoked.
Such cancellations, or rescission, of thousands of policies in California for flimsy reasons prompted a class-action lawsuit. A 2007 settlement with state regulators requires insurers to offer some restitution to customers stuck with medical bills.
The insurance industry is urging the governor to veto the bills — and insiders are confident he’s listening to them.
The rescission bill, the industry says, goes too far in its attempt to control insurers.
The gender-related bills, the industry also says, could push some people to drop coverage because they won’t want to absorb higher premiums for maternity coverage.
Issue of cost vs. bias Assemblyman Dave Jones, D-Sacramento, is author of the bill prohibiting gender rating, which for women can result in paying premiums 10 to 25 percent higher than men for identical coverage.
"I am very hopeful," Jones said, "the governor will not march in lock step with those who would discriminate against women."
Federal law prohibits gender rating in group policies. It also requires that maternity coverage be offered as a routine matter in employer plans with more than 15 people.
During the 1990s, 10 states, including New York and New Jersey, banned gender rating within the individual market. Two states limit it.
Anne Eowan, vice president of the Association of California Life and Health Insurance Companies, which opposes Jones’ bill, said gender rating makes sense in the smaller universe of individual plans.
Younger women use more preventive care than younger men, she said, but older women use it less frequently than men.
"We don’t feel it is discrimination," Eowan said.
In Minnesota and Montana, where gender rating in the individual market has also been banned, critics compared it to charging African Americans more than whites, according to a report by the National Women’s Law Center.
Although it is hard to isolate the impact that banning gender rating has on insurance markets, none of the states that have prohibited it reported a surge in costs, said Richard Cauchi, who tracks state health-related proposals for the National Conference of State Legislatures.
A biological reality Five states have also enacted laws that require the individual market to include maternity coverage, the other gender-related proposal now before Schwarzenegger.
In 1993, Montana’s Supreme Court ruled it was gender discrimination not to include maternity coverage in individual health plans.
Schwarzenegger vetoed two previous bills requiring individual-market maternity coverage. He said that "a mandate, no matter how small, will only serve to increase the overall cost of health care."
Opponents, including the National Federation of Independent Business, agree, arguing that a mandate eliminates choices for customers who struggle to find affordable plans and don’t need maternity benefits.
They said such bills only add to the affordability problem that the president and Congress are trying to solve.
Assemblyman Hector De la Torre, D-South Gate, the maternity bill’s author, said opponents are exaggerating cost increases.
A state analysis estimates that the bill would extend maternity coverage to 207,000 women between the ages of 19 and 44, and that on average it would increase premium payments by about $7 a month.
Supporters of the bill, including the California Academy of Family Physicians, point out that while men will never need maternity coverage, women will never need treatment for prostate cancer.
Risk should be shared, they say, and women should not suffer for the biological reality that they bear children.
De la Torre said California also has a fiscal interest in resolving this matter.
The state enrolls privately insured pregnant women in subsidized public coverage if the women can’t afford to pay for extra maternity benefits to tack onto their policy.
"The taxpayers have to pick up where the insurance companies don’t," De la Torre said.
Seeking clarity of law De la Torre is also the author of the rescission bill, a proposal Schwarzenegger already vetoed last year.
The governor called rescission "deplorable" in his veto message, but he said the bill was written to benefit lawyers and encourage lawsuits.
De la Torre said his new bill addresses the governor’s concerns. But opponents are urging a veto, saying that proving a person deliberately lied on an insurance application is a burden that would encourage fraud and lead to more lawsuits.
"It would penalize those who are honest," Eowan said.
Other states, such as Texas, are also debating how to regulate policy cancellations.
Without clear standards, the law in California isn’t strong enough to halt the practice, said Jamie Court, president of Consumer Watchdog.
Court said fines that state officials ordered companies to pay for rescissions were paltry — $1 million for Blue Cross — and that insurers are offering skimpy reimbursement.
Consumer Watchdog tracked the case of Fort Bragg resident Lee Rider, for example, who was saddled with $92,000 in medical bills when his policy was canceled after his insurer said he failed to disclose that a doctor had diagnosed him with neck strain.
The insurer offered him $5,000 to close his case. He turned it down, and the matter is in arbitration.
Court said consumers need clarity and protections. "It’s all about the balance of power," he said.
Contact the author, Susan Ferriss, Bee Capitol Bureau, at: (916) 321-1267, or [email protected]
GENDER-RELATED HEALTH LAWS
The Legislature passed two gender-related health bills now before the governor for his action. One requires insurers who sell individual policies to stop charging women more because of gender-based rates, and the other requires them to include maternity coverage.
STATES BANNING OR LIMITING ‘GENDER RATING’
Ten states prohibit "gender rating," basing individual-market insurance charges on gender: WASH., ORE., MONT., N.D., MINN., MAINE, N.H., N.Y., MASS., N.J.
Two states limit the practice: VT., N.M.
STATES REQUIRING MATERNITY BENEFITS
Five states require that maternity benefits
be included in individual plans. WASH., ORE., MONT., N.D., MASS., N.J.
Source: National Women’s Law Center and the National Conference of State Legislators