New Regulations Issued To Protect Individuals From Health Insurance Company Abuses

The Obama administration issued new regulations last week under the Patient Protection and Affordable Care Act which will protect consumers against abuses from health insurance companies. These new regulations will enable people to appeal decisions made by their health insurance companies and provide them with resources to do so. The regulations will go into effect on September 21, 2010.

Transgender individuals are often treated unfairly by health insurance companies. A health insurance company may deny a transgender person’s medically necessary treatment because of its transgender health exclusion or because it deems the treatment cosmetic or experimental. Additionally, an insurance company may refuse to provide coverage or drop coverage to someone simply because that person is transgender.

The new regulations will gives everyone, including transgender individuals, the right to appeal denials by health insurance companies. People can challenge 1) denials of medical treatments because an insurer deems it to be not covered by the health plan, 2) denials of medical treatments because an insurer deems them to be medically unnecessary or inappropriate for the individual, 3) the insurance companies decision to drop a person's health coverage, and 4) pre-existing condition exclusions.  If an insurer refuses coverage of a service on the grounds that it falls within an exclusion clause in the plan (such as an exclusion for “cosmetic” or “experimental” procedures, or “services for sex transformation”), individuals may use this process to dispute whether the exclusion applies to that service.

Individuals must appeal through their health plan’s internal processes. According to the new rules, insurance companies must provide people with detailed information on the grounds for the denial of claims or coverage. Insurance companies must also provide notice of the right to appeal and how to do so. These notices must be done in a culturally and linguistically appropriate manner. There must be a full and fair review of the denial and an expedited appeals process for urgent cases.

Additionally, the new regulations gives individuals the right to an external appeal if their claims are not resolved through internal appeals. For the first time, these appeals will be reviewed by state or federal decision-makers who are independent from health insurance companies. This process is significant because almost half of individuals who elected an external appeal in states where independent reviewers exist  won their claim against their insurance company.

NCTE applauds the release of these new regulations. Individuals deserve to access medically appropriate healthcare without fearing that health insurance companies will arbitrarily deny them coverage or deny claims.