Health Insurance Reform At a Glance – Insurance Market Reforms that Protect Consumers

The recently enacted Federal Health Care law, The Patient Protection and Affordable Care Act, is designed to improve the health insurance marketplace by strengthening consumer protections and providing consumers with the information they need to choose the best health care coverage for their families.

The following list of consumer protections is prepared by the United States House Committees on Ways and Means, Energy and Commerce, and Education and Labor.

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Hospitals Perform “Wallet Biopsy” on Patient Credit Scores Before Providing Treatment

According to BusinessWeek, hospitals and medical care providers are buying credit scores and other financial data about patients to determine if the sick can afford treatment.  In the hospital business they call it a “wallet biopsy.” A growing number of medical centers are using sophisticated software that digs into patients’ finances to help determine whether they will receive free or discounted care.

The procedure, which is not understood by most patients or even many doctors, generally doesn’t come into play when there is an emergency. But it has raised eyebrows for several reasons: Hospital administrators are looking at patient data—credit scores, credit-card limits, and 401(k) balances—not usually associated with treatment decisions.

Evelyn Leonard, a 49-year-old cafeteria worker, says that Halifax Health Medical Center of Daytona Beach, Florida refused to schedule her for radiation treatment earlier this year after staff members questioned her about possibly tapping her 401(k) account to help pay the bill.  Leonard’s annual income of about $18,000 qualifies her for charity treatment at Halifax, and the hospital gave her a 50% discount for a procedure last year related to a benign tumor behind her left eye. She estimates she still owes several thousand dollars to Halifax.

Patients are surprised to learn that they’re being subjected to the analysis, especially so in the case of nonprofit hospitals that historically have been magnanimous with charity care. And some health experts fear that hospitals will use techniques borrowed from the mortgage and car-loan industries to deny treatment to consumers with little or no health insurance.

The surest sign that wallet biopsies are catching on is the proliferation of analysis companies offering their services to the country’s 5,000 hospitals. SearchAmerica, a company that sells patient-analysis software, says that it has 1,000 hospital clients. The three major credit bureaus—TransUnion, Equifax (EFX), and Experian (EXPGY)—are marketing their own customized software for medical providers. And this summer, private equity giant Bain Capital invested $50 million in MedeFinance in Emeryville, Calif. (more…)

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MainStreet.com – Little Reasons for Big Insurance Hikes

A report by MainStreet.com, the small business and personal finance portal of TheStreet.com Network, discusses the “Little Reasons for Big Insurance Hikes.”

While you probably know that smoking can double the cost of your life insurance policy, or that teenage boys are harder to insure than teenage girls, you may not understand all the factors that insurers use to rate policyholders and determine annual premium prices. To help you in your search, MainStreet.com talked to industry experts to compile this little list of small choices that can, in fact, lead to big increases in the cost of your insurance policy.

For example, Amy Danise, the Senior Managing Editor for Insure.com cautions against taking up a dangerous hobby, such as scuba-diving, rock climbing or sky diving, before applying for insurance. Danise adds “the same goes for ‘risky’ occupations and travel to dangerous parts of the world.” In fact, your daredevil status may cost you a policy entirely so you may want to also trade in that motorcycle.

“The rules on insurance underwriting exist as patchwork of state by state regulations with little national uniformity,” Alex Maybaum, Director of Consumer Advocacy for AnnualMedicalReport.com (a web site that helps consumers estimate their insurance costs based on their medical history), tells MainStreet.

According to Vicki Sicilain, a Connecticut insurance agent, many providers are allowed to cherry pick who they insure and, subsequently, what they will charge them. “There needs to be better legislation against it,” she says. “I have been in the industry for 23 years. I am still discovering small mistakes that will drive up your insurance premiums.”
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