Congress and the White House are threatening action against insurance companies that attempt to discourage coverage to people who are guaranteed it under a 1996 health insurance reform law.
HCFA last week notified state insurance regulators and insurance companies of two practices in violation of the Health Insurance Portability and Accountability Act.
In violation under the HCFA notice are insurance companies that cut commissions to agents who sell policies to people or groups guaranteed coverage under the HIPAA. Also in violation are insurers that take too long to process the applications of such groups or individuals.
Meanwhile, Sen. Edward Kennedy (D-Mass.), one of the chief sponsors of the insurance reform law, has introduced legislation capping insurance rates for HIPAA-qualified individuals at 150% of standard rates.
The whirlwind of activity follows the release of a harsh General Accounting Office report that said the HIPAA wasn't living up to its promise (March 16, p. 6).
Last week members of Congress took advantage of a Senate Labor and Human Resources Committee hearing on implementation of the law to berate insurers about such practices.
"You better deal with this right away . . . or by the end of this Congress there will be legislation, it will pass and it will be signed into law with mandatory caps and controls," said Sen. Christopher Dodd (D-Conn.), a member of the committee.
The insurance reform law, passed in 1996, aimed to guarantee coverage to people with existing medical conditions when they change or lose jobs.
But some insurers have told agents they will cut or eliminate commissions entirely to agents who sell policies to high-risk people eligible under the HIPAA or groups that include such individuals, said HCFA Administrator Nancy-Ann Min DeParle.
Some insurers also have taken so long to process applications that individuals or groups eligible under the HIPAA suffer a "break" in health insurance coverage that renders them ineligible.
Both those practices prompted HCFA's bulletin last week to state insurance commissioners and insurers.