Tag: McKean Evans

Aetna Fined Over Autism And Substance Abuse Coverage

State regulators in Pennsylvania fined health insurer Aetna  this week, for violating rules on coverage of drug and alcohol abuse treatment and coverage of autism spectrum disorder.

A federal law called the Mental Health Parity and Addiction Equity Act generally forbids health carriers from discriminating against coverage for mental health conditions or substance abuse disorders.  These laws are important because health insurers are often incentivized to deny coverage for mental health and substance abuse conditions, as they often require costly inpatient therapy.  Fighting such denials is hard because unlike conditions like a broken bone or the flu, mental health and addiction disorders can be harder to objectively document. Many states have similar rules.

Pennsylvania regulators found Aetna violated these rules.  The state identified “confusing policy language which could have led consumers to inaccurately believe they did not have coverage for certain substance use disorder services.”

Aetna also imposed improper copays, coinsurance, and visit limits, as well as illegally requiring prior authorization for treatment.

Happy New Year – Washington Health Insurers Are Now Required to Expand Contraceptive Coverage

In 2019, Washington health insurers are required to expand contraceptive coverage. Any health plan in Washington issued or renewed on or after Jan. 1 must now provide coverage for the following:

  • All FDA-approved contraceptives, including drugs and devices; and
  • Voluntary sterilization procedures.

The new law also requires coverage for consultations, examinations and procedures necessary to obtain contraceptives or voluntary sterilization.  Importantly, most health insurers are now prohibited from imposing copayments, deductables, or other cost sharing on contraceptive coverage.

The law also broadly prohibits insurers from limiting insureds’ access to contraceptives.  For instance, insurers may no longer deny contraceptive coverage because the insured changed contraceptives recently.

Washington’s legislature enacted the expanded coverage requirements in order to guarantee equal access to reproductive health benefits and services.  The new law notes:

Neither a woman’s income level nor her type of insurance should prevent her from having access to a full range of reproductive health care, including contraception and abortion services;…Restrictions and barriers to health coverage for reproductive health care have a disproportionate impact on low-income women, women of color, immigrant women, and young women, and these women are often already disadvantaged in their access to the resources, information, and services necessary to prevent an unintended pregnancy or to carry a healthy pregnancy to term;…Existing state and federal law should be enhanced to ensure greater contraceptive coverage and timely access for all individuals covered by health plans in Washington to all methods of contraception approved by the federal food and drug administration;…

Court Ruling Emphasizes Common Sense Reading of Insurance Policy in Win for Policyholder

The Washington Court of Appeals recently decided Poole v. State Farm Fire and Casualty Company, a case about fine print in a homeowner’s policy.  After the Pooles’ home burned down, State Farm denied coverage under a technical reading of the words “similar construction.”  Washington’s Court of Appeals disagreed with State Farm and emphasized the traditional principal that insurance policies are interpreted based on their ordinary and common meaning as a reasonable policyholder would understand them.

The Pooles had a State Farm homeowner’s policy covering their home.  Their home also contained a shop the Pooles used as a business.  The shop was in the same building as the home. After the structure containing the home and shop burned down, the Pooles made a claim under their State Farm policy.  State Farm agreed the policy covered the loss and agreed to pay to rebuild the structure.

The dispute arose when the Pooles decided to rebuild the shop as a separate building from the home, rather than rebuilding both in the same building as they had been originally.  State Farm refused to pay to rebuild the shop in a separate building, claiming the policy only provided coverage if the Pooles rebuilt the shop in the same building as the home.

State Farm relied on language limiting coverage to the Pooles’ “dwelling” and allowing reconstruction only for “similar construction.”  Since the shop was only covered as an attachment to the Pooles’ home, State Farm argued rebuilding the shop in a detached structure wasn’t “similar construction.”

The court disagreed, applying the ordinary and common meaning of the term “similar construction.”  The court noted that the limitation on coverage to the Pooles’ “dwelling” limited only coverage, and did not limit the Pooles’ reconstruction options.  Regarding whether the detached shop was “similar construction,” the court found reasonable the Pooles’ argument that the detached shop featured the same style, quality and building materials, and was used for the same purpose, as the original shop.  The court also noted State Farm’s representative admitted “reasonable people could disagree” about whether the policy covered reconstruction of the shop in a detached structure.

Because the Pooles’ interpretation was reasonable, the court applied the traditional insurance law principle that policy language capable of more than one meaning must be given the meaning that favors the insured.  Accordingly, the court found in favor of the Pooles.

The Poole case is an important reminder that technical terms in insurance policies matter, and that insureds are entitled to have ambiguous insurance policy language interpreted in favor of coverage.

Know Your Rights Under Washington’s Patient Bill of Rights

Health insurance policyholders are guaranteed specific rights under Washington State’s Patient Bill of Rights.  The law’s purpose is to guarantee health insurance policyholders have access to quality health care.  If you find yourself in a dispute with your health insurance carrier, knowing these rights may help.

Policyholders Have The Right To Know About Their Coverage.  Health insurers must provide prospective policyholders specific information before the policyholder purchases coverage.  This include:

  • A list of doctors, hospitals and other providers who participate in the insurance plan.
  • An explanation of the policyholder’s premiums and charges;
  • How the policyholder can fight a wrongful claim denial, including through filing grievances;
  • Coverage information, including information about what prescription drugs are covered;
  • Explanations of any exclusions or limitations that apply to your coverage;
  • Information about the insurer’s efforts to protect policyholders’ confidential information;
  • Any applicable copayment, delectable, and/or coinsurance charges.

Policyholders Have The Right To Access Medical Treatment. Health insurers must allow policyholders to choose their own Primary Care Provider, although the insurer is permitted to require the policyholder to choose from a specific list.  The insurer must also allow policyholders to change providers if necessary.  Insurers must also  maintain adequate networks containing every category of licensed medical providers.  If needed to treat the policyholder’s condition, the insurer must provide referrals to specialists.  Finally, health coverage must include women’s health care.

Policyholders Have The Right To Challenge Claim Denials.  Health insurers must respond to complaints about wrongful coverage denials through a formal grievance process that is prompt, fair and impartial.

Insured California Wildfire Losses May Exceed $6 Billion

California’s increasingly-destructive wildfires are estimated to trigger billions of dollars in insurance claims.  As of November 2018, estimates show 15 wildfires in California destroying nearly 7,000 homes and business; 31 people have been killed and nearly 300,000 evacuated.  Beyond the loss of life and property damage implications for typical homeowner’s insurance coverage, the fires and attendant evacuations also potentially implicate business interruption or other commercial insurance provisions. Furthermore, the approximately 300,000 evacuated people will have significant additional living-expense claims under their homeowner’s coverage due to being forced to pay for temporary shelter and relocation costs.

Total losses are estimated at approximately $6.8 billion so far.   The price tag to rebuild will be particularly high because construction demand is already up from the 2017 wildfires and the strong housing market, leading to increased demand for construction labor and materials.  This high price tag translates to greater losses for homeowners and their insurance carriers.

California’s current wildfires are now the most destructive and deadliest on record.  From an insurance perspective, the destruction is particularly acute in high-property-value areas like Malibu.

The California wildfires serve as a reminder to policyholders to make sure they’re adequately covered for disaster losses, and to always act proactively to protect their rights after a loss.