Some health care reforms kick in this week

By Jamey Dunn

Starting Thursday, some provisions of the federal heath care reform package will roll out across the nation.

“September 23 is a milestone day for the countless Illinois families who have long suffered from coverage and claim denials, unjustified rescissions and inadequate health insurance coverage,” Michael T. McRaith, director of the Illinois Department of Insurance, said in a written statement.

The changes include:

• A ban on denying children younger than 19 access to insurance because of pre-existing conditions. Insurers would also be barred from denying coverage for treatment associated with children’s pre-existing conditions.
• A ban on rescinding policies for anything other than intentional fraud or misrepresentation. Insurers can “rescind,” or cancel policies up to two years after purchase because of inaccuracies on applications. According the Illinois Department of Insurance, the practice is abused in this state, which has the most rescissions in the country. The department sites an example of a teenager whose coverage was pulled after failing to disclose the “congenital defect” of needing braces to straighten her teeth. Now, companies cannot take coverage away due to unintentional mistakes on an application.
• Elimination of caps on lifetime benefits. Patients with chronic or costly conditions often ended up paying out of pocket or missing out on medical care after they reached the lifetime cap that insurance companies put on the cost of treatment. The law also calls for annual caps to be phased out by 2014.
• Free preventative care. Insurers will have to pay for a set list of preventative measures, such as immunizations and screening, without charging patients a co-pay.
• Claim denial reviews. Insurers must provide an appeals process for denied claims and allow for an external independent review for denied claims. Those requirements went into effect under a state law July 1, but “self-insured” plans often offered by unions and large employers were exempted . “Self-insured” plans are included in the federal law.
• Women’s health access. Insurance plans with obstetrical or gynecological coverage must allow women to visit any OB-GYN within the plan’s network of doctors without requiring approval or referrals.

Over the weekend, U.S. Sen. Richard Durbin highlighted some of the new changes to the law, including a provision that allows children to stay on their parents’ health insurance up to age 26. An Illinois law that went into effect in June 2009 allows unmarried dependents to remain on their parents plan until they turn 26. The new federal law will allow married residents under 26 to remain on their parents’ insurance as well. Under the state law, Illinois veterans qualify up to age 30.

A representative of the Illinois Insurance Association was unavailable for comment until tomorrow afternoon. Check back tomorrow for more on how the changes are expected to affect the insurance industry.