Gov. David Paterson signed a new law into the books this week that will enhance protections for health insurance users when providers suddenly cut their benefits.
The legislation was named after Ian Pearl. Pearl suffers from muscular dystrophy and requires 24-hour nursing care. The 37-year old man’s insurance initially provided the intensive care but later terminated the coverage without providing Pearl and his family a replacement policy that covered Pearl’s treatment.
Pearl and his family filed a lawsuit against his insurer, Guardian Life Insurance Company of America, advocating the legislature for rights. That lawsuit concluded when a court upheld the discontinuance.
However, a lawsuit later revealed insurance company documents that revealed Guardian had compiled a "hit list" of its costliest members, according to a blog post by Pearl on the Huffinngton Post last October. The company referred to the high cost individuals as "dogs" and "trainwrecks," and they debated how and when to dump us from the rolls, noted Pearl.
The law signed Thursday enhances protections for consumers in cases were a health insurer discontinues a class of policies or contracts.
"Inspired by Ian's courageous fight, this law fortifies consumer protections in the event a health insurer terminates coverage without offering a replacement," said Governor Paterson.
The new legislation amends the states current law by requiring insurers to provide written notice of pending discontinuation to all insured individuals covered by a group plan at least 90 days prior to the date of discontinuation of coverage. It also must provide all policyholders under a discontinued plan, options to purchase alternative, replacement health insurance products offered by the insurer.
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The law also mandates that a group plan not be discontinued to specifically drop an individual high-cost policyholder from the plan.
Lawmakers have also included a review process for the Superintendent to ensure that policyholders with serious medical conditions, who have utilized related insurance benefits in the 12-month period preceding the discontinuation, keep their present coverage if similar coverage is not made available.
“Ian's Law holds the insurance industry accountable and protects patients like Ian – and other families who have played by the rules – from being thrown off when they get sick. This is a major breakthrough for patients' rights," said Senator Eric Schneiderman.
“Ian’s Law” will take effect January 1, 2011.
