Insurance Laws Quietly Take Effect

Bobbie, a 60-year-old South Bay woman living with diabetes for most of her life, wanted to see a nutrition counselor to learn how to better manage her condition.

When her health insurer insisted that she’d have to switch to one of its HMO plans to get coverage--meaning she’d have to change doctors--she knew better.

Bobbie, a social worker who asked that her last name not be used because colleagues are unaware of her illness, showed health plan representatives a copy of a new state law. It requires HMOs and other health plans to pay for diabetes-related supplies, such as syringes, insulin pumps and glucose testing strips, as well as some education and nutrition programs.

It wasn’t until after Jan. 1--when the law signed by Gov. Gray Davis became effective--that she got her approval. The law will mean savings for other diabetics whose health coverage previously forced them to pay out of pocket for such items as glucose strips, which can cost $70 a month or more.

The law that helped Bobbie get her nutritional needs squared away is among a number of state health insurance reforms that went into effect this year. But consumers may not be aware of them.

Other new laws assure that contraceptives are covered just like any other prescriptions and give a price break to Medicare recipients who don’t have prescription benefits (see related story, S1). Health plans can no longer deny coverage for severe psychiatric illnesses, and HMOs can’t quibble about psychiatric care provided during an emergency room visit. Two other measures broaden access to hospice benefits to the dying and ensure that seriously ill patients don’t have to be facing death to challenge denials of experimental treatments.

Jamie Court, advocacy director of the Foundation for Taxpayer and Consumer Rights in Santa Monica, says California was behind the times until now.

“California has far fewer mandated benefits than most other states,” he says, “so what you’re seeing is [that we’re] just catching up to what other states have done.”

While the diabetes law was designed to benefit consumers, it should also help health plans save money. Studies have shown that patient education and preventive care programs for diabetics can reduce costs by forestalling complications of the disorder, such as blindness, kidney failure and heart disease.

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Another law expands contraceptive coverage. For four years, Planned Parenthood and other organizations have lobbied for expanded medical insurance coverage of reversible birth control methods, such as pills, diaphragms, IUDs and hormone implants.

About 90% of insured Californians had contraceptive coverage before the new law--mostly through HMOs, according to a California HealthCare Foundation analysis. The law brings in those traditional health insurers that excluded it.

“Contraception is about making responsible choices that help in the preventive stages [of pregnancy], versus dealing with the consequences afterward,” says Kate Alson, vice president of public affairs for Planned Parenthood of Pasadena. “Women across the state were asking for this.”

Steven Thompson, vice president of government affairs for the California Medical Assn., says the Women’s Contraceptive Equity Act will cover “almost everybody.” That’s because the contraceptive coverage requirement, like other state-mandated benefits, doesn’t affect so-called self-insured plans--mostly large employers that pay for workers’ medical insurance themselves and are governed by a federal benefits law called ERISA, the Employee Retirement Income Security Act. There are no solid figures, and estimates vary. Court believes the self-insured make up 5 million to 7 million of the 24 million Californians with health insurance.

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Two other measures help address the traditional inequity between coverage for psychiatric conditions and for purely physical illnesses. HMOs must now pay for psychiatric consultations when an emergency room doctor suspects a psychiatric disorder. Conni Barker, director of government relations for the California Psychiatric Assn., says some HMOs in the past have refused to pay for both the ER doctor and the psychiatrist, “so the hospital and one of the doctors got stiffed.”

Washington Hospital Healthcare System in Fremont, the bill’s sponsor, frequently ran into this problem, she said.

The bill doesn’t apply to traditional health insurers, just to HMOs, which objected to paying psychiatrists outside their networks, said Anne Eowan, a lobbyist for the Assn. of California Life and Health Insurance Companies, a trade group in Sacramento.

Health plans and HMOs must pay for treatment of severe mental illnesses, like schizophrenia, depression, manic depression, anorexia and bulimia, as well as serious emotional disturbances of children, under provisions of another new law.

The state also is changing the way end-of-life care is provided. By Jan. 1, 2002, terminally ill patients of any age who are members of HMOs will be entitled to hospice care benefits similar to those now provided for Medicare recipients. The law ensures that terminally ill patients receiving in-home hospice care can get coverage for visiting nurses and social workers, while those in residential hospice programs are fully covered.

HMOs didn’t oppose the bill, Thompson says, because “to the extent you’re able to use hospice, you reduce hospital days and physician visits,” resulting in cost savings.

Revisions of an existing law will mean that an HMO patient need not be terminally ill to appeal denial of experimental treatment. The law had required a doctor to certify that a sick patient had less than two years to live before the patient could appeal such a denial.

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By 2001, another HMO reform bill will take effect extending that kind of independent review process to any denial of medically necessary treatment. At the same time, another law will allow patients to sue for punitive damages when HMOs deny them medically necessary treatment.

In addition, beginning on July 1 of this year, medical, hospital and surgical health plans will have to provide “all generally medically accepted cancer screening tests,” not only the breast and ovarian cancer tests they now cover.

Health care consumers can best take advantage of new benefits by getting familiar with their plans, Eowan said.

“If they would read their policy, they’re better able to access the system and are not running around trying to figure out what coverage they have,” she said.