By Julie
Appleby JUNE 5, 2019
Caitlin
and Corey Gaffer know they made a mistake.
Anyone
could have done the same thing, the Minneapolis couple says. Still, they can’t
believe it cost them their health insurance coverage just as Caitlin was in the
middle of pregnancy with their first child.
“I was
like ‘What?’ There’s no way that’s possible,” said Caitlin, 31, of her reaction
to the letter she opened in early October telling them the coverage they had
for nearly two years had been canceled. It cited nonpayment of their premium as
the reason.
Except
they had paid the bill, they thought.
The
Gaffers’ snafu — and their marathon battle to correct the error with insurer
HealthPartners — is featured in the podcast “An
Arm and a Leg,” which launches its second season this week and is
co-produced by Kaiser Health News.
Like
the Gaffers, tens of thousands of Americans each year — exact counts aren’t
available — are dropped by their insurers over payment issues, sometimes with
little or no prior warning from their insurers.
The
question is: Can insurers cancel people with little or no notice? The answer is
yes … and no. Like so many issues in American health care, it is surprisingly complicated.
This is
one problem the Affordable Care Act was designed to fix. Certainly, safeguards
were put in place. Insurers can’t cancel people when they fall ill, for
example. But the protections for being dropped for a missed payment are uneven.
Consumers who get an ACA subsidy have more protection than those who don’t.
The
Gaffers didn’t qualify for a subsidy. So they were subject to state law.
Minnesota’s law requires insurers to provide at least 30 days’ notice before
canceling, said Scott Smith, spokesman for the state Department of Health,
which regulates HMOs. However, an administrative rule seems to undercutthat requirement.
The
Gaffers didn’t get a notice, they say. Their efforts to correct their error
were stymied until Dan Weissmann, creator and host of “An Arm and A Leg,”
started making inquiries about their case.
Misfired
Payments
The
problem for the Gaffers started in early September. They changed checking
accounts and had to set up all new online payments. When they made their
monthly $730 health insurance premium payment, they mistakenly sent it to a
hospital owned by HealthPartners rather than the health plan itself. The
hospital didn’t let the health plan know it had a payment from the Gaffers.
Compounding the problem, the couple sent their October payment a couple of
weeks later to the correct place but had insufficient funds to cover the
amount.
The
Gaffers got a letter from HealthPartners dated Oct. 8 canceling coverage back
to mid-September. Caitlin was six months pregnant.
“It was
a busy time in our life,” said Corey, 32, who runs an architectural photography
studio. “We made these two little mistakes, but were never given any notice
that we were making mistakes until after the fact.”
Why
didn’t the hospital and health plan communicate about the misdirected payment?
After all, they are part of the same system and that could have avoided the
problem altogether.
HealthPartners
spokeswoman Rebecca Johnson said its hospitals are supposed to notify the
health plan if they receive premium payments in error, but said that “even
though we have this process, we are not always notified of this or not notified
in a timely fashion.”
As far
as a past-due notice to the Gaffers, Johnson said HealthPartners’ policy at the
time was to include information on monthly statements about outstanding
balances.
That,
however, is different from getting a warning that “you will be canceled as of
this date,” said JoAnn Volk, a research professor at the Georgetown University
Center on Health Insurance Reforms.
Still,
the Gaffers’ story does have a happy ending — including an apology and some new
notification practices by HealthPartners — but not before they racked up lots
of stress and nearly $30,000 in medical bills incurred while Caitlin was
uninsured briefly during her complicated pregnancy.
Same
Insurance, Different Rules
The ACA
bars insurers from retroactively canceling policies if consumers fall ill or
discover they are pregnant —things that could have occurred in most states
before the federal law passed.
But it
does allow allows cancellations for two reasons: false information on an application
or failure to pay premiums.
Those
who qualify for a tax credit — because they earn less than 400% of the federal
poverty level, or roughly $50,000 for an individual — get a 90-day grace period
after missing a payment. Also, the law requires insurers to notify those
policyholders that they have fallen behind and face cancellation. If payment is
made in full before the end of the 90-day grace period, they are reinstated. If
not, they’re canceled and medical costs incurred in the second and third months
of the grace period fall on the consumer.
This
policy keeps federal subsidy dollars flowing to insurers during the grace
period, even if a consumer has a financial wobble.
It’s
different for people like the Gaffers, however, who make too much for a
subsidy. They are subject to state laws and can be dropped much more abruptly.
Most
states have a 30-day grace period to make a payment after the premium is due,
said Tara Straw, a senior policy analyst at the Center on Budget and Policy
Priorities. But how much prior notice insurers must give before canceling — if
any — varies by state.
“In
most states, plans would balk at also having to send a notice of delinquent
premium,” said Straw. “But notice is important for consumers so they can
correct the situation and make the payment, especially in a case like this
where they made an honest mistake.”
It’s a
policy that harks back to a time before the ACA when individual consumers could
be dropped for almost any reason. It isn’t clear why the Gaffers received no
notice.
Spokeswoman
Johnson, when asked about the state requirement, wrote: “Members are notified
of any outstanding balance on their monthly premium statements. They have a
30-day grace period.”
HealthPartners
told the state’s insurance exchange as part of an inquiry into the Gaffer’s
case, that “as far as past-due notices go, we do not send letters for members
that do not have [a subsidy],” an appeals document shows.
Following
the attention on the Gaffer’s plight, HealthPartners has a new policy, rolled
out in March and April for customers who don’t get subsidies: Those who fall
behind will get a late notice around the 15th of the month, said spokeswoman
Johnson.
That
might have helped the Gaffers, but it is still far less time than the 90-day
window the insurer must give by law to anyone who bought the same insurance
plan but got a subsidy.
An
Apology
As for
the Gaffers, who scrambled for months trying to get coverage and went uninsured
for a while, there’s good news.
First,
they got new coverage from a different insurer before they welcomed baby
Maggie, born without a hitch and healthy in late January.
Months
later, after fielding questions from “An Arm and a Leg,” HealthPartners called
the Gaffers: It wanted to reinstate them — and cover the outstanding medical
bills racked up during their time uninsured.
“We’ve
apologized to the family, reinstated their coverage and view this situation as
an opportunity where we can do better,” spokeswoman Johnson said in an email.
The
Gaffers have learned a lot in the process.
“Being
an advocate for yourself is such a huge thing,” said Corey.
He’s
glad HealthPartners has now said it will send warnings to consumers who fall
behind on payments.
Oh, and
just to be sure, the couple’s premiums are now on “auto pay” and “we have like
eight calendar reminders set up,” Caitlin said. “Today it popped up three
times: ‘Make sure insurance is paid.’”
Julie
Appleby: jappleby@kff.org,
@Julie_Appleby
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