Surprise, Surprise: Insurers Put Their Bottom Line before Women's Health

"Optional maternity coverage has a very unfavorable impact on our bottom line…[t]his coverage option will be eliminated in stages." This is just one of many illuminating quotes from insurance company leaders that can be found in a set of memos released last week by the House of Representatives' Committee on Energy and Commerce (E&C). The Committee collected information from the four largest for-profit insurers in the country as part of their investigation of two common individual market practices: coverage denials for pre-existing conditions and lack of maternity coverage.

The memos corroborate and expand upon what the National Women's Law Center discovered when we conducted our own studies of women's experiences in the individual health insurance market, where people buy coverage on their own directly from insurers. In our 2008 and 2009 "Nowhere to Turn" reports, we found that it was very difficult (if not impossible) for a woman to find an individual health plan that covered maternity care, and that women who were pregnant, who had a prior Cesarean section, or who had received fertility treatments were routinely denied coverage or charged more for these "pre-existing" conditions. We shared this information with the E&C Committee staff during their investigation, and indeed, their memos substantiate all of our findings and more! Here are some highlights that will get your blood boiling:

• From 2007-2009, the four largest insurance companies denied coverage to more than 650,000 people because of a pre-existing condition. Over this period, denial rates increased by 49 percent, three times as fast as the application rate.
• All four insurers list pregnancy as a medical condition that results in "automatic" denial of individual health coverage. Sometimes expectant fathers and women/men in the process of adoption are also denied coverage. 
• Insurance companies typically do not provide coverage for pregnancy-related claims unless mandated by state laws. When add-on "maternity riders" are available, benefits are severely limited.

The E&C memos also show that from 2007-2009, insurers were considering ways to expand the use of pre-existing conditions to avoid paying for a broader class of medical claims, and were also trying their best to get out of providing maternity care to women who might use the benefit. (Another gem of a quote from an insurance executive: "[the] increased risk is that by offering a maternity rider we would be attractive to potential members who are likely to have children.")

Their plans were foiled, however, by the March 2010 passage of the Affordable Care Act (ACA), which both prohibits insurers from denying coverage to women based on pregnancy or any other pre-existing condition, and ensures that maternity care is an "essential health benefit"  that must be covered in all health plans sold to individuals and small businesses. Both protections will be in place, nationwide, by 2014. Thanks to the ACA, we can read the two E&C memos with the relief of knowing that insurers' days of putting their bottom line before women's health are numbered.