NC Health Reform

Progress on the Fundamental Eight: Guaranteed Insurance Renewal

Posted on 09. Oct, 2009 in A Closer Look

This is the eighth and final post in our analysis of the eight consumer protections President Obama has identified as fundamental to successful health care reform. 

Protection Number Eight: Guaranteed Insurance Renewal
Insurance companies required to renew any policy, regardless of health status, as long as the premium is paid.

This is another policy area that was addressed many years ago in North Carolina. BCBSNC has long complied with laws prohibiting insurers from dropping coverage when a covered individual becomes ill. As we noted in post number four of this series, under North Carolina law, there are specific and limited grounds for policy termination, including fraud and failure to pay premiums.

BCBSNC has, when appropriate, actually gone beyond these requirements in situations where we waived underwriting and absorbed members from insurers shutting down business in North Carolina. The law didn’t require this, but we thought it was the right thing to do.

So there you have it. Eight fundamental tenets that, per the President, define consumer protection. These fall into four major categories:

1) We’re already doing it. This includes no cancellations or non-renewals for health reasons and the extension of dependent coverage up to age 26. There may be insurer abuses in other states, but we’re already on board with many of the president’s proposals.

2) We can readily do it, though not everyone will be thrilled with the results. We can set premiums without considering a customer’s gender, but it won’t be to the advantage of young men and older women, who will see their costs rise compared to customers of the same age of the opposite sex in order to spread health care costs. We can get rid of out-of-pocket costs for preventive care, but that will increase premiums for most customers.

3) We can do it as soon as Congress broadens access. As soon as Congress enacts a meaningful requirement that everyone have coverage, we can do away with medical underwriting and pre-existing condition exclusions. It’s important to understand that broadening access to health coverage will involve increased premiums to some consumers in order to extend coverage to people who cannot currently afford premiums because of significant health conditions.

4) Can be done but should be carefully considered in light of current cost trends. Proposed legislation contains inflexible limits on out-of-pocket costs, often well beyond what many businesses and individuals want or need. These provisions would increase premiums as health care costs are already spiraling upward, running counter to the primary goal of making health care more affordable.

The fourth category brings home what we’ve been saying all along – there is a difference between insurance reform and health care reform. You simply can’t get your hands around costs through insurance regulation alone. Lasting change here will require more fundamental reform on how we deliver health care, including improving our inefficient and fragmented system, influencing individual choices like tobacco use and sedentary lifestyles, and changing financial incentives to reward quality over quantity – better care, not just more procedures.

Congress can, and should, pass significant health care reform this session that gives all Americans immediate access to the first three categories and establishes a process for making measureable progress on the remaining provision — the highly complex, deeply engrained problems in our system that simply can’t be fixed overnight.

Doing nothing is not an option. The system, particularly its cost, is simply unsustainable. BCBSNC is firmly behind smart reform that builds on the strengths of the current system to bring every American the protections – and responsibilities – of a truly inclusive health care system.

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