Bills Would Increase Accountability and Oversight of Insurers

Maryland began a major expansion of health insurance to the poor last year. But with tight budgets threatening that investment, lawmakers are moving to improve protections for those who have insurance but struggle to meet their medical costs.

As their constituents continue to face soaring premiums and out-of-pocket costs and policies that cover less, legislators have introduced bills that try to provide greater accountability and regulation of the insurance industry. They say the changes will come at minimal cost to taxpayers.

Insurers, which are powerful in the capitals of Maryland and Virginia, appear open to some of the proposals. But they oppose others, saying their profit margins are being squeezed by economic and competitive pressure.

Bills moving through the Maryland General Assembly would shorten the waiting period that health plans can impose on patients with preexisting medical conditions, crack down on out-of state companies that sell stripped-down policies and force insurers to spend less on administrative costs and more on medical care.

In Virginia, Gov. Timothy M. Kaine (D) is expected to sign a bill that makes insurance more affordable by allowing small businesses to offer their workers policies that cost less but provide more limited coverage. Several measures that would have increased oversight of the industry failed in the just-concluded session of the legislature.

Some of the proposals in Maryland might appear more technical than substantive. "But it turns out that we're trying to undo outdated rules that are not fair to consumers," said Maryland Insurance Commissioner Ralph S. Tyler, who is pushing many of the proposed changes. "Most citizens don't know what their rights are."

In the past decade, the national average cost for annual premiums for individual and family coverage has doubled, to $4,704 and $12,680 last year, according to the Kaiser Family Foundation, a nonprofit group that studies health policy. Health advocates say they want patients to get more for their money.

Individual insurance policies, bought by people who are self-employed or do not have coverage through their employer, tend to be the most expensive and, in some cases, the most restrictive. Deborah Schumann, a retired ophthalmologist from Bethesda, discovered this last year when her doctor saw something suspicious on a mammogram and ordered another one. Her policy did not cover the second test, called a screening mammogram. Her out-of-pocket charges came to about $155.

"Their view was: You had the wrong kind of mammogram, so we won't pay for it," Schumann said. "I want the money I pay to the insurance company to go to my health care."

One proposal in Maryland would prohibit an insurer that fails to resolve all questions about an applicant's preexisting condition from canceling the policy if such a condition is subsequently discovered. Another would reduce from seven to five years the period an insurer can look back at someone's medical records to find preexisting conditions.

Tyler also is targeting three out-of-state companies that sell individual policies with severely limited coverage. The policies cost less -- but the health plans are not required to disclose to buyers how bare-bones the coverage is. The bill would require disclosure, and the insurers would have to offer more substantive policies.

Another measure would prohibit insurers from discriminating in underwriting against women, who can pay hundreds of dollars a year more than men for identical coverage.