AUGUSTA, Maine — Mainers would get a “Health Care Bill of Rights” to assure them more information about health insurance policies and protection from arbitrary insurance company decisions under legislation announced Thursday at a State House news conference.
“Amazingly, you can buy an insurance policy today without knowing what it will cover and without being able to compare that policy with what another policy offers, from that company or another company,” said Rep. Sharon Treat, D-Farmingdale, sponsor of the legislation.
“We are not talking about whether a policy covers some esoteric new procedure, I am talking about buying a policy that says it covers pregnancy services and finding out that does not cover giving birth.”
Her legislation would require that policy details be posted on an insurance company Web site and be provided to the state insurance superintendent for posting on that agency’s Web site so consumers can compare coverage and prices.
“This is critical for consumers, insurers and providers to make more informed decisions about treatment options and comparison shop,” said Joe Ditre, executive director of Consumers for Affordable Health Care.
He said the group is supporting Treat’s legislation as part of an effort to require more transparency throughout the health care system. The group released a consumers guide to health care reform that stresses transparency as the key to improving health care.
“Consumers don’t have the information they need to make informed decisions,” he said.
Treat said the marketplace today for health insurance has “failed” because consumers are not able to shop for an insurance plan that best fits their needs because they are not sure exactly what a plan covers.
“This has to change,” she said.
Helen Hanson from South China agreed. She told reporters she thought her family health insurance policy had a $10,000 deductible but found out it was a $10,000 deductible for each family member so there had to be $30,000 in out-of-pocket payments before the policy covered any costs.
“I found this out this Monday,” she said, “So as of today, my teenage daughter, my husband and I are joining the 125,000 other Mainers who are uninsured.”
Gordon Smith, executive vice president of the Maine Medical Association said doctors are as frustrated as their patients by the lack of transparency by health insurers. He said health care should be patient-focused, not insurer-focused.
“Increasingly the system has been developed around the needs of insurance companies and patients are the last to be considered,” he said. “That needs to change.”
Treat’s legislation also would put a cap on administrative costs and profits of health insurance companies. Under the legislation, insurers would be capped at 15 percent of revenues for administrative overhead and company profits.
Treat said government health insurance programs, such as Medicaid, have administrative overhead of less than 5 percent of overall costs.
“Shouldn’t insurers have to prove a rate hike is actually necessary?” Treat questioned. “Right now the burden is on the insurance superintendent to prove the rate hike isn’t needed, and much of the data in support of the increase is kept secret.”
Her legislation would shift the burden of proof to the insurance company to prove the need for increased rates and require the data used in rate setting be made public. She said far too much about insurance regulation is shrouded in secrecy and the process needs to be open to public scrutiny.
Treat said her legislation, which has yet to be printed, would require that the insurance superintendent conduct “market conduct” studies every three years. She described those as an audit of the decisions by insurance companies on violations of policy terms such as denying coverage because a procedure was not properly pre-approved by the company.
“This is standard practice in many other states,” she said.
Attempts to reach the state’s largest health insurer, Anthem, were unsuccessful but in the past it has opposed legislation that would require disclosure of all data used in its rate requests, and have opposed changes in the regulatory structure of the health insurance business.