Alaska Is Among Worst For Health Insurance Consumer Protection

Posted by health4all

Posted: June 15, 2008 - 3:16 pm

A 50-state survey, released June 12, reveals that insurance companies in most states including Alaska are not prohibited from denying health coverage to people with pre-existing conditions, refusing to pay for services needed to treat common ailments, adding huge premium surcharges for people with family histories of health problems, and yanking policies and denying payments when consumers face a rash of medical bills.

The survey was released by Families USA, the national organization for health care consumers. It is the first 50-state survey of insurance commissioners that focuses on states’ regulatory oversight of the individual health insurance market. That market is increasingly important as employer-sponsored health insurance declines and some elected officials promote its deregulated expansion. Here are just a few of the findings for Alaska:

In the vast majority of states including Alaska, insurance companies are permitted to reject individuals for coverage based on their health status, occupation, or even their recreational activities.

If an insurance company does accept an individual’s application for coverage, few states significantly limit how much an insurer can increase an individual’s premiums based on what the insurer deems to be health risks (which can include anything from cold sores to hobbies to below average height). Alaska has no such limits.

Insurance companies will not necessarily provide coverage for the very health services individuals need when they sign up for a policy. In all states, insurance companies are not obligated to cover pre-existing conditions for most people for at least the first six months that an individual has a policy. In Alaska insurers can exclude coverage for pre-existing conditions for more than one year.

Not every state ensures that premiums are reasonable by reviewing premium rate increases before insurers impose them. And few states require that at least 75 cents of every dollar collected in premiums be spent on medical services rather than administration and profit. In Alaska insurers can spend less than 75 cents of every premium dollar on medical services.

Health insurance consumer protection is a public policy issue. Which legislators would like to step up to the plate on this one?

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