CAHI Opposes Texas Legislation; S.B. 418 Would Ruin Texas' Health Insurance Market

4/7/2003

From: Tom Gardner of the Council for Affordable Health Insurance, 703-836-6200 ext. 386, http://www.cahi.org

ALEXANDRIA, Va., April 7 -- The Council for Affordable Health Insurance (CAHI) strongly opposes Texas S.B. 418 which, if enacted, will destroy Texas' health insurance marketplace.

S.B. 418, sponsored by Texas State Senator Jane Nelson (R-Flower Mound), contains many objectionable provisions. However, the most damaging is the verification and guarantee of payment provision. This provision prohibits health insurance companies from applying contractual limitations and exclusions in contracts between the insurance company and the insured.

"This bill will force insurance companies to pay first and ask questions later," stated CAHI State Affairs Director Mary Spear. "Forcing insurers to pay for treatment before they can prove the claim is legitimate, is not only bad business but it's neglecting the insurers' fiduciary responsibility to their customers to ensure they are paying valid claims."

"In 2001, the Texas Department of Insurance found that of the almost 26.5 million claims received by various insurance companies, 98 percent were paid within 45 days," said CAHI Director Dr. Merrill Matthews. "When claim forms are incomplete or contain erroneous information, the insurer may need extra time to fully review and confirm the legitimacy of a claim. That's just good business, not a public policy crisis."

To schedule an interview with CAHI Director Dr. Merrill Matthews or CAHI State Affairs Director Mary Spear (both Texas natives) contact Tom Gardner, director of communications, at 703-836-6200 ext. 386 or tgardner@cahi.org.

CAHI is a research and advocacy association of insurance carriers active in the individual, small group, MSA, and senior markets. CAHI's membership includes health insurance companies, small businesses, physicians, actuaries, and insurance brokers. Since 1992, CAHI has been an advocate for market-oriented solutions such as MSAs to the problems in America's health care system.