Washington State’s Office of the Insurance Commissioner (“OIC”) has had a busy March. The OIC, Washington State’s regulator responsible for overseeing insurance sold in Washington, issued several orders regarding discriminatory insurance pricing and the COVID pandemic.
First, the OIC banned insurers from using credit scores to price insurance. The insurance commissioner found the ban necessary to prevent discriminatory pricing in auto, renters, and homeowners insurance. Using credit scores to price insurance has been criticized as discriminatory because the practice results in low-income policyholders and people of color paying more for insurance. Auto insurance companies, for example, charge good drivers with low credit scores nearly 80% more for state-mandated auto coverage. This practice is anticipated to become even more egregious as COVID emergency protections expire this year, causing people who experienced financial hardship due to the pandemic to pay more for insurance merely because their credit scores have dropped. The insurance commissioner acted after legislation banning credit scores in insurance pricing failed to advance through the Washington State legislature.
Second, OIC extended certain emergency orders regarding COVID. These orders require health insurance companies to waive cost-sharing and protect consumers from surprise bills for COVID testing. The orders also require insurers to allow out-of-network providers to treat or test for COVID if the insurer lacks sufficient in-network providers. These orders were originally entered last year and are now extended to April 18, 2021. OIC also extended the requirement that insurers cover telehealth services.
Third, OIC responded to COVID vaccine misinformation. False reports have percolated that getting the COVID vaccine can void life insurance coverage or affect premiums or benefits. The OIC clarified that COVID vaccination will not harm your insurance eligibility.
Lastly, OIC gave an update on the effect of the American Rescue Plan Act on health insurance premiums for policies purchased on the Exchange (a/k/a “Obamacare” policies). OIC explained that the revisions in the new law reduces the percentage of income that people must pay for health coverage on an Exchange policy. The new law also increases subsidies for people receiving unemployment benefits and covers COBRA premiums for people who lost their job but want to keep their employer-sponsored coverage.