During Vice President Biden’s address to the NAIC last week, he outlined some key elements of the Administration’s health care reform efforts. One of these, “No discrimination for pre-existing conditions” has remained a constant during the health debates and public forums this year.

While Congress continues to deal with possible bill versions and compromises, some states took action this year in addressing these two issues. Regarding pre-existing conditions, the Maryland Legislature took significant steps this year with the enactment of Senate Bill 79 and House Bill 32. Both measures:

• Prohibit inquiries on certain conditions, illnesses, diseases, or medical procedures and sets permitted timeframes
• Prohibit attaching an exclusionary rider to an individual health benefit plan unless the insurer or nonprofit health service plan obtains the prior written consent of the policyholder
• Authorize imposition of a preexisting condition exclusion or limitation on an individual for a certain condition under certain circumstances
• Prohibits imposition of a preexisting condition exclusion or limitation on a certain individual under certain circumstances

Additionally, Maryland took steps to counteract the industry practice of policy rescissions through House Bill 235. This prohibits an insurer from rescinding a contract or certificate unless it has completed medical underwriting and resolved all reasonable medical questions related to written information BEFORE issuing the health benefit plan. The burden of persuasion is on the insurer. The new requirements and restrictions should reduce the number of health care policy rescissions, as insurers are strongly encouraged to perform medical underwriting during the application process and not at a later date when claim is submitted. California currently has proposed regulations which address similar issues. The regulations, if adopted as proposed, effectively prohibit insurers from rescinding, cancelling or limiting an insurance contract unless they can meet the standards set for avoiding prohibited postclaims underwriting. Clarity in terms of the type of insurer diligence that constitutes complete medical underwriting, as well as the requirement to resolve all reasonable questions which arise from written information submitted on or with the application are integral parts of this proposal. To the extent that an insurer has not completed the defined medical underwriting prior to policy issuance, the regulations prohibit the insurer from subsequently cancelling, rescinding or limiting the policy in question, unless it is shown that the applicant committed fraud when completing the application.

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