Assurant Insurance Group, which sells health plans directly to individuals, may face $2.5 million in fines if the state insurance commission has its way.
The state agency alleges the firm violated state law by engaging in illegal claim denials, exclusion policies and other issues.
It’s atypical for the state commission to impose fines on insurers.
Yet health policy experts say the individual market is riddled with such problems due to inadequate oversight.
NHPR’s Dianne Finch has more.
When people don’t have access to employer health plans, they often turn to the individual or “consumer” market.
Those consumer health plans typically have much higher out of pocket expenses than large group plans.
And unlike the larger market, there is almost no federal oversight.
So state insurance commissions typically take on the regulatory role.
Gail Andersen of East Kingston knows all about the individual market.
The mother of two started out with a plan from Anthem Blue Cross.
ANDERSEN: “But it continually went up and up to the point when I had my last child she’s now 14, our policy was like $1400 a month. And we really didn’t have any claims against it except for pregnancy.”
Since her family was healthy, she decided to try a plan with higher out of pocket expenses – but lower monthly premiums.
Catastrophic illnesses would be covered – but doctor visits and medications would not.
But that decision led to catastrophic debt when her daughter developed a serious issue with her jaw.
ANDERSEN: “The orthodontist noticed it. He said I’ve seen this before you really have to see a specialist her jaw doesn’t seem to be growing correctly on one side.”
With that specialist, MRIs, CAT scans and lab tests – Andersen racked up $12,000 dollars of medical bills.
And her daughter needed more tests.
So she decided to go back to her former insurer to get a plan with higher premiums and more coverage.
But Anthem Blue Cross denied coverage for her daughter due to a pre-existing condition – her jaw.
That rejection is legal in the individual consumer market.
The state offers a safety net for those denied coverage –it’s called the “high risk pool”.
Andersen signed up for that program at $1500 per month - and a $1700 deductible.
?
“….now I’ve got the New Hampshire insurance so I’m thinking I’m safe now kind of now right… I was thinking maybe I only have to spend $1700 maximum and I’ve already paid some of it..that’s what I was thinking but I was wrong… “
She ended up paying the $1700 deductible twice … because the calendar year rolled over while her daughter was going through needed tests
Finally, Andersen discovered that her husband, as a real estate agent, could sign up for a small business plan.
Those small group plans ARE subject to regulation, so her daughter couldn’t be rejected for a pre-existing condition.
“Not that it’s cheap! It’s going to be $1400 per month and we still have deductibles of $1500 dollars per person ….now that’s per person.”
But then came more bad news.
The surgeon’s secretary informed Andersen that she would need to pay up front for some procedures before the surgery.
ANDERSEN: “she said he requires all these molds of her mouth and face.. so we’re going to need 1500 dollars before we start the molds and before we start surgery were going to need another 1500 dollars. I said but we have insurance you just bill the insurance. Oh no – most insurances almost no insurance pays it.”
By now - the family had purchased four plans since they gave up the first Blue Cross plan 3 years ago.
Andersen didn’t file any complaints with the state insurance commission.
After all, no laws were broken.
And Anderson’s case isn’t unusual - about 200 complaints are on file against 10 insurers that sell individual plans in the state.
“That private health insurance market essentially is the Wild Wild West of healthcare.”
That’s Ron Pollack, the executive director at Families USA - a national healthcare advocacy group.
His group recently published a national survey on what states are doing to protect consumers in the individual market.
He says that consumer protection laws overall are weak at best – not just in New Hampshire.
Pollack: “This is the place where insurance companies most discriminate and cherry pick for people with preexisting conditions they deny coverage to them they often charge much higher premiums for people with history of health problems they rescind policies when people make significant claims.”
Pollack said that New Hampshire’s high risk pool – the one Andersen tried –exists in many states.
But, he says, they’re not affordable.
Pollack: “This is not a substitute for having insurance companies be required to take all comers and to place limitations on how high premiums they charge because someone’s got a pre-existing health problem of family history of a health problem.”
Leslie Ludtke, the NNNNN at the insurance commission, agrees with Pollack that the individual market is problematic.
Ludtke: “And it’s partially because of the nature of market – it’s is a market that is obviously most vulnerable to what’s called adverse selection, which is people only buying coverage when they need it which is generally not a very good business model for a company to have”.
Some insurers won’t offer individual insurance in states that restrict their practices.
It’s not profitable.
Ludtke: “…it has to be a market that commercial business would want to participate in unfortunately as a result of that consumer protections are very weak in the market”.
Ludtke added that her agency has set some limits.
Ludtke: “It’s expensive in the high risk pool but we did put limitations on that. Our high risk maximum right now is a 125 percent of the standard price in the individual market.”
?
That may not sound like much of a limit.
But Family USA’s Pollack says that New Hampshire should be commended for imposing any limit – since many states don’t.
He adds that the individual market price the limit is based on is unaffordable.
New Hampshire’s Insurance Commission is considering reducing the rates for low income families.
Meanwhile, Gail Andersen has paid off about $6000 dollars of medical bills – but owes much more than that.
For NHPR News, I’m Dianne Finch
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