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Health Care Reform:

Health Insurance & Affordable Care Act

Affordable Care Act: State Rules Can Boost Costs

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“You could make an argument that it is effectively discriminating ... against someone who has a particular medical condition, but it’s clear under the law that insurers can charge extra for non-essential health benefits,” said Timothy Jost a health law professor at Washington and Lee University. “If the state has determined this is not an essential health benefit, then you would have a hard time arguing it.”

While state mandates vary, Virginia’s laws around bariatric surgery for obesity are “kind of an anomaly,” said Steve Cindrich, director of strategic marketing and business development at Optima, an insurer owned by hospital system Sentara.

In Virginia, bariatric surgery is “not an essential health benefit, which is why the state has allowed carriers in this state to treat it as a rider,” making it a choice for consumers, he said.

Policies that include bariatric surgery as an add-on have been offered for years, Cindrich said, noting, however, that they are “an expensive offering, which has kept it from becoming more popular.”

Similar riders for maternity care were often seen in policies sold nationally to consumers who buy their own coverage, said Mathematica’s Chollet.

“The difference in the cost of a plan with pregnancy coverage and those without was essentially the full cost of a normal delivery,” she said, noting that the health law requires insurers to cover maternity care, starting Jan. 1.

Riders for specific conditions or treatments are “essentially a pre-payment plan” for the treatment, Chollet said.

While they may simply reflect Virginia’s law, the riders could also be seen as an attempt by insurers to avoid enrolling overweight patients, who are likely to have other health problems. 

Insurers may be thinking, “why put out the welcome mat for people, when we can make bariatric surgery optional?” Chollet said.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.

Fri, Oct 11 2013

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