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Consumer protection

Health insurers are subject to a wide range of consumer protections under the Oregon Insurance Code and the Affordable Care Act. Many of the provisions in the Insurance Code apply to all health insurance, including limited benefit policies such as those that cover a specific disease or pay a fixed amount for each day of hospitalization. Others, including those required by the Affordable Care Act, target comprehensive health policies, referred to in law as "health benefit plans."

Click to see details of the provisions below.

Mandates. State and federal law require health insurers to cover certain services and to include certain types of providers in their plans. Not all Affordable Care Act reforms apply to all plans. Generally, a plan may be considered grandfathered, and thus exempt from some provisions of the new federal law, if the plan existed before the law took effect (March 23, 2010) and meets other criteria.

Key reforms under Affordable Care Act include:

  • Adult children may stay on their parents' policies up to age 26 even if they no longer live at home or no longer are students or dependents on a tax return. Both married and unmarried children qualify.
  • Insurers can no longer use pre-existing conditions to deny coverage in the individual market.
  • Preventive services must be provided with no co-pays or other cost sharing.
  • Policies may not include any lifetime limits on how much they pay for essential health benefits.
  • Annual limits on what policies pay for essential health benefits are restricted.

​​Federal law identifies 10 categories of essential benefits​ that must be covered by health benefit plans (excluding grandfathered plans) issued in individual and small group markets both inside and outside the exchange.

Federal regulations require states to select a benchmark plan that reflects services offered by a "typical employer plan." Oregon selected a plan sold by PacificSource Health Plans as its benchmark, then supplemented that plan with pediatric dental and vision benefits and habilitative services to meet federal requirements.

Federal subsidies are available to help individuals buy health insurance through exchanges. However, federal subsidies cannot be used to pay for any state mandates that exceed the state’s benchmark plan. When people obtain coverage through the exchange, the state must pay for the costs of any coverage exceeding the state’s benchmark plan that are required by state mandates. Thus, Oregon policymakers will likely weigh the costs of any new state mandates signed into law.​​​​​​​​​​​​

Unfair discrimination. ORS 746.015 prohibits “unfair discrimination … between risks of essentially the same degree of hazard in the availability of insurance, in the application of rates for insurance … or in any other terms or conditions of insurance policies.” For example, insurers must treat people who share characteristics such as age similarly.​​​

Misrepresentation. ORS 746.075 and 746.100 prohibit various types of false or misleading representations, including a broad prohibition against any “practice or course of business which operates as a fraud or deceit upon the purchaser, insured, or person with policy ownership rights.”​​​

Claims Mishandling. The division investigates consumer complaints about potential claims mishandling. Investigations involve such issues as whether insurers pay claims timely, conduct reasonable investigations before denying claims, and correctly implement new laws.

In 2014, the division recovered approximately $2.3 million on behalf of consumers who were hurt by practices that violated insurance laws. In addition to recovering money on behalf of consumers, the division worked with insurance companies to change practices that posed harm to other consumers. ​​​

Unfair claims settlement practices. ORS 746.230 prohibits misrepresenting facts or policy provisions in settling claims, failing to act promptly upon claims-related communications, refusing to pay a claim without conducting a reasonable investigation, not attempting in good faith to equitably settle claims in which liability has become reasonably clear, and failing to explain the policy basis for denial of a claim.​​

Privacy. ORS 746.600 to 746.690 protect the privacy of health information. ORS 743B.555 guarantees the right to have protected health information sent directly to the patient instead of to the person who pays for the health insurance plan (the primary account holder).​​

Patient protections. ORS 743B.001 to 743B.452 provide specific protections to consumers and disclosure requirements for insurance companies relating to denial of claims, rights to appeals and independent review of adverse decisions, rights to continuity of coverage, rights of women to choose primary care providers and have access to women's health care providers, and specific claims payment requirements. The Affordable Care Act extends many of these rights to employees of self-insured businesses.​​​​

Rescission. For comprehensive coverage, federal law prohibits insurers from rescinding coverage (canceling it retroactively as if it never existed), unless fraud or an intentional misrepresentation of material fact is involved. Oregon law extends this protection to all health insurance coverage.​​​​​

Consumer advocacy. In 2015, the division’s consumer advocates handled approximately 21,000 inquiries and 3,700 consumer complaints about all lines of insurance. About 50 percent of complaints involve health insurance. In addition to helping individual consumers resolve insurance problems, the advocates also look for violations of the law and broader trends for referral to market analysts. The market analysts conduct investigations designed to stop patterns of consumer abuse. The market surveillance process can result in enforcement actions, with civil penalties of $50,000 or more, for serious patterns of consumer abuse.

In addition to the advocates who help consumers with commercial insurance, the department’s Senior Health Insurance Benefits Assistance (SHIBA) program helps Oregonians make educated decisions about Medicare. SHIBA is a statewide network of trained volunteers who provide one-on-one help to people with Medicare. ​​​

Transparency. Health insurers doing business in Oregon must provide reasonable cost estimates for common medical procedures via interactive websites and toll-free telephone numbers. For these procedures, the estimates must include information about how much of the deductible an enrollee has met; the amount of other costs, such as co-insurance, that an enrollee must pay; and the amount of any applicable benefit maximum.​​​

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