DCBS Media Release

February 6, 1998
For more information:
Joel Ario, (503) 947-7270
Ed Nieubuurt, (503) 947-7226

New health reform laws help consumers

Health insurance is more accessible and consumers have better information to help them choose coverage that meets their needs, thanks to health reform measures passed by the 1997 Oregon Legislature. Lawmakers adopted Senate Bill 21, which established operational, disclosure, and reporting requirements for health insurance plans, and SB 98, which amended the Oregon Insurance Code to incorporate requirements of the 1997 federal Health Insurance Portability and Accountability Act (HIPAA). Key provisions of each measure were effective Jan. 1, 1998.

Joel Ario, manager of the Oregon Insurance Division's Consumer Protection Section, said SB 21, known as the Patient Protection Act of 1997, established new disclosure requirements and other standards that will safeguard consumer rights. "Oregon has been a leader in using managed care and other innovative strategies to reduce costs and expand access to health care, but our progress has raised some legitimate consumer concerns," Ario said. "This legislation helps address those concerns."

Among other provisions, the law requires health insurers to:

• Provide information to enrollees about how their benefit plan works, including what services are covered, what costs are shared, and how to access services.
• Provide more detailed information to an enrollee upon request, such as treatment policies for a particular condition, and coverage for particular drugs.
• Provide a grievance procedure with two levels of review, and annually report grievance statistics to the Oregon Department of Consumer and Business Services.
• Cover emergency room screening and stabilization services whenever a "prudent layperson" would have considered a situation to be an emergency.

The law also prohibits insurers from penalizing health care providers for communicating openly with their patients on treatment and referral options.

Ed Nieubuurt, manager of Health Programs in the Oregon Insurance Division, said Oregon already had many of the health reforms in place that eventually were adopted by Congress in HIPAA. Legislators approved SB 98 to "reinforce and enhance our existing standards and to bring Oregon into compliance with federal law," he said.

One provision enhances an existing Oregon law requiring insurance carriers to offer continued coverage to eligible individuals who leave the carrier's group health plan. This provision, known as "portability," allows individuals to maintain group-type coverage after they leave a group plan. To qualify, the individual must have been covered by a group plan for at least six months, apply for portability coverage within 63 days, and not be eligible for Medicare coverage.

SB 98 extends portability rights to qualified individuals who were covered by a non-Oregon group plan while residing in Oregon, and qualified individuals who lose group coverage in another state and move to Oregon within 63 days.

A second provision of SB 98 expands the number of small employers qualifying for guaranteed insurance coverage for their employees. Since October 1996, Oregon law has prohibited insurers from refusing to issue coverage to small employers with 2-25 workers. To comply with HIPAA, the guaranteed availability of coverage was expanded to companies with up to 50 employees.

SB 98 and HIPAA also extend "guaranteed renewability" protection to large groups with more than 50 employees. Guaranteed renewability means a group's coverage cannot be canceled by the insurer unless coverage is discontinued for all groups. Oregon law has required guaranteed renewability for small employer groups and individual policyholders since October 1996.

Oregon law also was ahead of the federal government in limiting the use of pre-existing condition provisions in health plans. Since October 1996, such provisions can only apply during the first six months of coverage. Credit toward the six-month limit must be given if the individual had other health insurance coverage within 63 days.