The House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations held a hearing Thursday titled, "Insured But Not Covered: The Problem of Underinsurance."
According to Henry A. Waxman (D-Calif.), chairman of the House Committee on Energy and Commerce, problems associated with people paying for insurance without receiving enough coverage are increasing.
The hearing is a continuation of the committee's examination of problems in the private health insurance market and a year-long investigation that has revealed "troubling abuses," Waxman said.
He said the committee learned through hearings last year that insurance companies have canceled policies based on unintentional mistakes on application forms and even because of errors caused by the company's own agents.
"Most people expect their health insurance policy to protect them just when they need it the most, but there are a number of ways in which insurance policies come up short," Waxman said. "More and more policies contain caps, which are limits on the amount an insurer will pay for an individual's care over a lifetime, in a single year, or for particular services. Other plans exclude from coverage certain pre-existing conditions or limit coverage in other ways. And insurers increasingly shift risk to individuals through greater cost-sharing, such as higher deductibles, co-payments or co-insurance."
Waxman said it isn't surprising that a combination of skyrocketing health costs and skimpier coverage has caused the ranks of the underinsured to grow. In 2007, there were 25 million underinsured Americans, a 60 percent increase from 2003.
A bill recently passed by this Committee, HR 3200, addresses the root causes of underinsurance, Waxman said. It would provide:
- A ban on lifetime and annual caps on the amount insurers will pay;
- Annual limits on total out-of-pocket costs;
- No more discriminatory insurance pricing based on health status, gender or occupation;
- No more deductibles or co-pays for preventive care;
- No coverage denials based on pre-existing conditions;
- Affordability credits so that lower-income families can afford coverage and access care;
- A required core set of benefits to ensure coverage for essential healthcare services;
- A mandate that plans have adequate provider networks for the benefits they cover.
"These reforms are essential to ensure that people not only have health insurance, but are truly protected from financial ruin in the event of a health catastrophe," Waxman said.
"Regardless of how you define this financially fragile group, the sad consequences of being underinsured can be devastating, leading to financial ruin, bankruptcy and making medical decisions based on costs rather than care," said Rep. Bart Stupak (D-Mich.), chairman of the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations.
"As the cost of health insurance skyrockets, more and more Americans are finding that they can only afford bare bones policies, leaving them one illness, one accident away from bankruptcy," he added.