Health-Insurance Buyers Lack Safeguards, Study Says
A report by a consumer advocacy group criticizes states for not doing more to protect consumers who buy health insurance through the individual market, rather than through their employers or the government.
Most states, including Indiana, don’t require insurance companies to sell policies to all applicants, don’t prohibit charging higher premiums based on health status, and don’t require insurers to spend at least 75 percent of premium revenues on health care, rather than on marketing, profits and other expenses, according to Families USA.
However, Indiana is one of only seven states that the group says requires affordable coverage alternatives for those rejected by insurance companies.
“The individual health insurance market is still the wild, wild west for America’s health-care consumers,” said Ron Pollack, Families USA’s executive director. “It is a market with many abuses and with far too few state-level consumer protections.”
Pollack said the federal government needs to set a minimum level of protection that states can always add to.
He said the number of people buying insurance through the individual market is growing as employers drop or reduce coverage and as more people work part-time or as independent contractors.
Families USA surveyed state insurance departments and reviewed state laws to determine what consumer protections are in place in each state.
A comment from the Indiana Department of Insurance was not immediately available.
A spokesman for the insurance industry group America’s Health Insurance Plans said a survey it released last year found that individual health care coverage is more affordable and accessible than widely believed.
But Families USA’s report gave Indiana a mixed review on how insurers can handle pre-existing conditions. For example, insurers in Indiana can exclude coverage of pre-existing conditions for seven to 12 months after enrollment. That’s better than excluding pre-existing conditions for more than a year, but not as good as standards in Massachusetts and New Mexico, where insurers can exclude coverage of existing conditions for only six months after enrollment.
Families USA also gives Indiana only “partial credit” for how far it lets insurers look back into a person’s medical history for pre-existing conditions. And the group says Indiana doesn’t have adequate definitions for pre-existing conditions.
However, Indiana is ranked high for requiring insurers to complete medical underwriting and evaluation at the same time someone applies for coverage, as well as for giving consumers the right to appeal if their policy is revoked. But the group faults Indiana for not reviewing all insurers’ requests to revoke policies.
Indiana mostly does well on enforcing consumer rights, although the group says Indiana’s external review program should be available to consumers in all state-licensed health plans, instead of only some plans.
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