Friday, March 07, 2008
Jason Marks: PRC/Feldman Health Insurance Bill Makes New Mexico a Leader in Consumer Protection
This is a guest blog by Jason Marks, NM Public Regulation Commission Chairman, discussing an important health insurance reform bill just signed by Gov. Bill Richardson. The legislation is getting national praise and attention, including including a front-page story in USA Today:
As everyone knows by now, the 2008 New Mexico Legislature was unable to come to consensus on any of several competing healthcare reform proposals. Except that’s not entirely true. Moving through the Legislature outside of the media spotlight, a health insurance reform bill that originated with the PRC and its then-Chairman Ben Ray Luján, was passed and signed into law. This legislation, Senate Bill 226, sponsored by Senator Dede Feldman (D-Alb, below left) puts New Mexico into the forefront of consumer protection in at least two areas that help families obtain and keep needed coverage.
New Mexico has become the second state in the country to enact a law limiting insurers’ ability to rescind health insurance policies and/or deny paying claims based on mis-statements on the insured’s original application for coverage. Until Senate Bill 226, insurance companies could retroactively rescind coverage during the first two years of a policy after a patient developed an expensive medical condition that the insurer didn’t want to cover. The insurer could decide that they’d rather refund your premiums and stick you with the responsibility for paying large medical bills. The insurer merely had to point to a relevant mistake or omission on the original application for coverage -- even if that mistake was unintentional. The PRC/Feldman bill raises the standard of proof so as to require the insurer to show that the applicant’s statements or omissions were willful or fraudulent.
Senate Bill 226 also extends the allowable lapse in “creditable coverage” from 63 to 95 days. Currently, if someone loses coverage under a group plan and applies for alternative coverage within 63 days, the period during which the individual was not covered is counted against any waiting periods on pre-existing conditions. The bill allows more time to seek alternate coverage. Several other states have increased their maximum lapse to around 90 days, but at 95 days, New Mexico has the most consumer-friendly standard in the nation. Lastly, Senate Bill 226 raises the minimum cap on coverage for policies under the N.M. Minimum Healthcare Protection Act from $50,000 to $100,000.
This all started during the summer of 2007, when PRC Chairman Ben Ray Luján (right) arranged for several PRC discussions on the subject of healthcare and health insurance reform. With unanimous support from the Commission, Luján directed the PRC’s Insurance Division to look for ways to improve health insurance coverage for New Mexico families. As the options began to come together, Commissioner Luján, our Superintendent of Insurance, Mo Chavez (below left), and I met with Senator Feldman to discuss legislative approaches to healthcare reform in New Mexico. Senate Bill 226 was the result. The bill’s enactment fixes the three “gotchas” that have kept needed health insurance coverage from some families while we wait for comprehensive healthcare reform.
Although Senate Bill 226 received little local media coverage, the PRC/Feldman health insurance reform legislation has drawn national attention, including a front-page story in USA Today, coverage in trade journals, and inquiries from ABC Nightly News.
The most important part of the story, is of course, that the reforms that have now been signed into law by Governor Richardson will provide real benefits to consumers. But almost as important to the long term is the change that this effort signifies at the PRC’s Insurance Division. Only two years ago, a different Superintendent of Insurance was in office and his main legislative priority that year was a bill to relax certain regulatory standards so that troubled insurance companies could relocate to New Mexico. Lobbyists were involved, as were rumors of campaign donations.
Fast forward to today, where we are seeing the fruits of commitments Commissioner Luján and I made to clean up the Insurance Division, reorient it more towards protecting and serving consumers, and to appoint a replacement Superintendent of Insurance who shared our values and vision. New Mexico may not have achieved all the healthcare reform progress that was hoped for this past year (or that is needed). But we have made to a point where we are getting national recognition for our leadership in protecting insurance consumers, and not for our regulatory failings and scandals.
This is a guest blog by Jason Marks, Chairman of the New Mexico Public Regulation Commission. Commissioner Marks is running for reelection in November and has qualified for public campaign funding for his race. Fantastic. To learn more, visit his website.
If you'd like to submit a piece for consideration as a guest blog, contact me by clicking on the Email Me link on the upper left-hand corner of the page.
Getting to the root of this so called progress after sifting through all the back patting makes me sick.
Citizens have one more month to get back onto the insurance hamster wheel after losing coverage?
"Senate Bill 226 also extends the allowable lapse in “creditable coverage” from 63 to 95 days. Currently, if someone loses coverage under a group plan and applies for alternative coverage within 63 days, the period during which the individual was not covered is counted against any waiting periods on pre-existing conditions. The bill allows more time to seek alternate coverage."
What does this doublespeak mean? I don't know but it looks like insurance companies can still immorally deny pre-existers. Please could someone clarify this and just how another month makes a real difference for a sick person?
"law limiting insurers’ ability to rescind health insurance policies and/or deny paying claims based on mis-statements on the insured’s original application for coverage. Until Senate Bill 226, insurance companies could retroactively rescind coverage during the first two years of a policy after a patient developed an expensive medical condition that the insurer didn’t want to cover. The insurer could decide that they’d rather refund your premiums and stick you with the responsibility for paying large medical bills. The insurer merely had to point to a relevant mistake or omission on the original application for coverage -- even if that mistake was unintentional. The PRC/Feldman bill raises the standard of proof so as to require the insurer to show that the applicant’s statements or omissions were willful or fraudulent."
Hold on! They raised some sort of "standard". What does this mean? After all, the big powerful rich insurance company has a entire ritzy law firm on retainer. The sick person who just lost a job still has to find a lawyer, go to court and PAY for that while coping with job loss and illness.
That this was the way these bastards have been conducting business all this time is beyond the darkest evil of Mordor.
The fact is that this bill only managed to slightly roll back criminal immoral behavior of for profit denial strategies of evil predatory greed meisters.
Passage of this paltry bill only serves to reveal just how evil is our expensive for profit health insurance system and just how corrupt and spineless is our law-makers.
A chasm in the health care of countless citizens as only slightly made narrower. Let's all go out and have a beer!
Posted by: qofdisks | Mar 7, 2008 9:30:19 AM
gofdisks: I see you are a member of the all or nothing contingent. You may not think this legislation means anything but it certainly will to those it will allow to retain coverage. I guess you believe it would be better not to make needed incremental changes while we wait for the miracle of universal coverage. I guess you've already got your insurance so you don't care that people are losing it and that this bill will help at least some of them avoid that.
One of the most irritating traits about true believers is that they criticize progress because it's not perfect or all encompassing. That's the same approach Hillary Clinton took when she worked on her health care reform back in the 90s. My way or the highway. All or nothing. That's why it failed. That's why we haven't had more progress since then.
Why attack those who are doing what they can in a negative situation?
I guess you also don't think it's progress to get rid of an insurance supt. who's an outright crook and get someone in there who will work on the behalf of consumers instead of insurance companies.
Posted by: Nurse R | Mar 7, 2008 10:26:47 AM
I am losing my health insurance and I can tell you as a middle aged person with so-called pre-existers, this bill won't do jack for me.
Even with my health insurance, I can not afford to go to the doctor. I am fighting for my health constantly with lifestyle but sometimes my blood pressure just spikes.
Now I find out that if I am able to buy insurance somehow after losing my husband's insurance that problems that may result from one of my conditions will not be covered for a long time? Even though I am PAYING?
Why am I responsible for reporting my medical history? There is a file at the doctor's office in which I regularly sign permission for full disclosure for the insurance company. They could just look at that rather than deny coverage for "unintentional" disclosure.
The papers on my desk are already a mile high and I am supposed to track every Byzantine detail in which some paper generating insurance company endeavors to muddle the hapless.
Sorry, I am in some all or nothing camp when a system does not function properly it is time to re-design, re-tool and change personnel. It must be the engineer in my soul. Selling a faulty product that is essential for survival is called fraud.
This bill just seemed like so much cowardly tip-toeing after reading the hope that the Mathmatica analysis provided. It is corruption plain and simple that prevents doing what is not only righteous and moral but efficient and functional.
Even so, yes, yes, yes I am so grateful for the incremental chipping. I hope that it can benefit my small child someday if the system does not completely collapse upon itself from greed first. I am filled with so much hope.
Posted by: qofdisks | Mar 7, 2008 11:47:25 AM
Beleive me I feel for you and agree that a massive overhaul is needed. But it sounds like you would begrudge those who CAN benefit from this bill because you don't think you can? I'll take any positive change over no positive change, and applaud those who work hard to get it in this difficult political environment.
I'm sure you know that Sen. Feldman has worked long and hard to make both small and big improvements in the health care system. I find it very encouraging that she and the PRC and the new Insurance Supt. are working together for the changes that CAN get through a legislature dominated by the likes of fake Democrats Tim Jennings and John Arthur Smith.
I feel for you but I have no patience with your bashing those who are making the best of a bad situation.
I hope you will support challengers to the corrupt ones in the legislature and help get some better Democrats elected so we can move ahead.
Posted by: Old Dem | Mar 7, 2008 12:09:50 PM
I only use myself as an example because I consider myself to be typical. I so not begrudge the few that are helped at all. Very few exceptions indeed will be helped. I recognize that the people that care are up against intolerable obstacles in this age of greed.
I was expressing how appalled I truly am upon hearing some of the ugly details of how health insurance conduct business and how they are allowed to conduct business.
I expect that most people like me are ignorant as to how bad it really is and I was absolutely shocked.
Posted by: qofdisks | Mar 7, 2008 3:28:50 PM
Many people do not realize that the PRC has a consumer relations division that can handle consumer complaints regarding insurance companies, maybe they can assist you in your situation. If not maybe they can work to help find some solutions to your situation, anyways it is worth a try and in the meantime know that people are trying to fix the problems, it is a start although not a complete solution. Having a mother who lost her job to only then (once she had no insurance) find out she has terminal cancer (thankfully she qualified for a trial program that covers treatment of the cancer but not management of her diabetes) has made me realize that something has to be done about our insurance industry, I am just grateful we have some good elected officials who are fighting the good fight and trying to fix a system that is so wrong. God bless you.
Posted by: Woodstock | Mar 7, 2008 4:53:53 PM
For some, the New Mexico Insurance Pool is available:
I started looking at it after I got the notice from Blue Cross that the monthly premium for my $1,000 deductible major medical policy would rise to $547.52 as of 4/1/08
I *think* that for those losing coverage, or who are otherwise basicly uninsurable, it provides insurance with no exclusions or waiting periods for pre-existing conditions.
Posted by: Michael H Schneider | Mar 8, 2008 8:22:03 PM