NEW: Health Insurance Consumer Protection Bills Becomes Law
Wednesday, June 20, 2012
The General Assembly has approved and the governor has signed legislation to establish health insurance standards consistent with the standards established in the existing federal Patient Protection and Affordable Care Act of 2010.
Passed by the legislature last week were two bills – 2012-S 2887A by Sen. Rhoda E. Perry (D-Dist. 3, Providence) and 2012-H 7909A by Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly). They were signed by the governor this week.
Gov. Lincoln Chafee and Lt. Governor Elizabeth Roberts, in consultation with the Office of the Health Insurance Commissioner (OHIC), requested enactment of the legislation to comply with laws and to take into account any pending rulings by the Supreme Court.
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Among the provisions of the legislation are:
A prohibition of pre-existing condition limitations. These sections will prohibit carriers from excluding coverage of medical conditions existing prior to enrollment of the subscriber, effective January 1, 2014.
A uniform explanation of benefits and coverage. This consumer protection provision will establish standards for the forms sent to consumers to explain what is and is not covered in their health insurance plan. These uniform standards will address a common complaint of consumers about their difficulty in understanding the terms of their policy.
A prohibition on rescission of coverage. This provision prohibits a carrier from rescinding a consumer’s coverage in the absence of fraud or intentional misrepresentation of a material fact. In the past, some health insurance carriers engaged in the troublesome practice of rescinding a policy when the subscriber filed a claim for a serious medical problem, reasoning that the insured must have falsely completed the insurance application.
A prohibition on annual and lifetime limits. These sections phase in a prohibition on annual and lifetime policy coverage limits, responding to consumer complaints with respect to some insurers that their coverage terminates just when they are afflicted with a serious and expensive medical condition.
Coverage for individuals participating in clinical trials. This consumer protection expands upon R.I.’s existing law relating to cancer trials by ensuring that patients have access to new health care treatments in the clinical trial phase of approval.
Medical loss ratio. The Affordable Care Act (ACA) enacted a program to ensure that health insurance companies allocate a minimum amount of each premium dollar to medical care, as opposed to administrative costs, profits and contributions to surplus. The federal minimum loss ratio standard is 85 percent in the large group market, and 80 percent in the small group and individual markets. If carrier’s loss ratio falls below these minimums, federal law requires the carrier to return rebates to individual and business consumers. These sections of the legislation will permit OHIC to monitor and oversee a carrier’s implementation of and compliance with the federal rebate requirements.
Emergency services. This consumer protection provision ensures that consumers are not denied access to health services in emergency circumstances, even if the emergency services are provided out of network or by a non-participating provider, and ensures coverage without unreasonable administrative burdens. The provision also establishes cost sharing standards for these situations.
Internal and external appeals of adverse benefit determinations. This provision will authorize OHIC to implement the ACA’s consumer protections relating to internal and external appeals in the case of adverse benefit determinations which are within OHIC's jurisdiction.
Filing of policy forms. These provisions clarify that all health insurers must file and obtain OHIC's approval of their health insurance policies sold to consumers. These sections also clarify that carriers must comply with their filed and approved rates and forms.
Access to primary care. This provision amends current R.I. law by expanding consumer protections ensuring patient access to primary care providers, pediatricians, and obstetricians and gynecologists (if those specialty providers are the patient’s designated source of primary care).
Eligibility for children’s benefits. These sections expand on current R.I. law to require the extension of coverage for adult children of the policyholder up to age 26. The current R.I. age limit is age 25.
Specific provision of the act would not be enforced by the OHIC in the event that corresponding sections of the federal ACA are repealed or found invalid as the result of court rulings.
