November 25, 2009

Post Claims Underwriting and Rescission Practices

The report was written by Peter Harbage, MPP, Harbage Consulting, Hilary Haycock, Harbage Consulting, and Meredith King Ledford, Harbage Consulting. Regulation of the individual health insurance market is conducted through a mix of federal and state efforts. While federal law primarily delegates insurance regulation to the states, the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) offers important consumer protections that states are to enforce. Among other things, HIPAA requires health insurers to renew or continue health insurance coverage at the policyholder's discretion. This paper seeks to help policymakers understand what does and does not work under the current system and how these failings can be overcome.

To gain a better understanding of such issues, the report examined four states to identify how the individual insurance market is regulated today. The lessons from these states will help policymakers improve the existing system and inform them as they move forward with health reform. The paper offers a review of state laws, consumer engagement, and regulatory activity related to health insurance rescission through case studies from California, Connecticut, Florida and Texas.