In the spirit of this holiday season, the Wisconsin Alliance for Women’s Health invites you to share in a series of blog posts, each containing a special “gift” from health care reform. Some have already been implemented and some are gifts still to come; but all are very important improvements to our healthcare system.
Gift Four: Increased ACCOUNTABILITY
Today we’re blogging about a lesser-known and experienced gift of health reform, but one that is incredibly important and touches us all in one way or another. One of the greatest complaints we hear about health care is dealing with insurance companies. This is especially important to women because, on average, women have far more contact with the health care system over their lifetimes than men, and have historically played a key role in coordinating care for their families. Women are the ones negotiating with the insurance company when a service isn’t covered.
The law increases the accountability of insurance companies by regulating their profit and administrative margins, relative to actual patient-care costs. It also stops companies from dropping people from coverage when they get sick.
The Affordable Care Act (ACA) provides for greater accountability regarding company profits and overhead costs through the Medical Loss Ratio (MLR) standard. This says that 80 to 85 percent of all costs must be directly related to patient care, and that only the remaining percentage can be used for company profits, administrative costs like marketing, and CEO salaries. Companies must make this MLR information public and notify customers if they do not meet the standard and provide rebates. For more on this regulation, check out our recent blog posts on the topic here and here.
In times of serious illness or injury, the last thing women need is to find out that they’ve been dropped from their coverage, a practice known as rescission. This practice is no longer allowed under the ACA. Insurers also are now prohibited from canceling a policy because of an unintentional mistake on paperwork. In the past, insurance companies could search for an error or technical mistake on your application and use it to deny payment for services. The only way a policy can be canceled now is if the company can prove intentional fraud. Additionally, insurers must provide 30-day notice and an opportunity to appeal all rescissions.