Statutes against discrimination in health insurance and Medigap coverage

Antidiscrimination Statutes

The 1996 Health Insurance Portability and Accountability Act prohibits both issuers of health insurance policies and administrators of managed care plans from discriminating against any person on the basis of health factors. No person can be denied eligibility for health insurance or participation in a managed care plan or charged a higher premium based on his or her medical condition, claim experience, receipt of health care, medical history, genetic information, or evidence of insurabililty or disability.

Employers are not required by law to offer health-care coverage to their employees, but if they do, discrimination is prohibited by law - for example, exclusion from coverage of birth control devices from a prescription drug plan because the exclusion discriminates against female employees.

Medigap Coverage

Medigap coverage is supplemental coverage that persons may purchase to provide benefits when available Medicare benefits have been exhausted. Medigap policies include supplemental hospitalization coverage that applies when allowable Medicare hospitalization coverage ends. Policies must conform to one of the several model policies approved by the National Association of Insurance Commissioners (NAIC). The model forms require insurers to provide, at minimum, a core benefit package to the same extent as would be covered by Medicare but for exhaustion of Medicare benefits.

Medical Necessity

Health insurance policies typically cover costs of services that are medically necessary. This generally means those services that have been established as safe and effective and furnished in accordance with generally accepted professional standards to treat an illness, injury, or medical condition. Inpatient care for medical observation, evaluation, or other care that could be provided on an outpatient basis will not be considered medically necessary.

Other phrases commonly used in the insuring agreements of health insurance policies to express the same concepts are reasonable and necessary expenses and usual and customary expenses. Regardless of the phraseology used, because these terms appear in insuring agreements, they are subject to the general rule that an interpretation that results in coverage is to be favored over one that does not.

In conjunction with the medical necessity provisions, there are usually some form of preapproval or prior authorization requirements that apply to certain categories of treatments or procedures. Physicians and hospitals are usually, but not always, familiar with such requirements and they often, but not always, take care of the preapproval processes. If you have any doubt whether your physician has or will take care of these procedures for you, confirm with him or her. This arguably is one of the advantages of managed care plans. The gatekeeper physicians must know these procedures and get approval before they even discuss further treatment with you in most cases.

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