Indiana is one of only a few states in which individuals cannot agree to waive coverage for pre-existing conditions in order to get at least some type of health insurance. That could change this year, however.
Dueling bills in front of the Legislature have passed out of the House and Senate and are being considered by the opposite chamber. Rep. Gerald Torr, R-Carmel, authored one of the measures and is confident some form of his legislation will pass.
The object is to give those who have been denied coverage due to a preexisting condition an opportunity to purchase insurance at an affordable rate, Torr said. The bills pertain only to individual policies.
"You can have allergies and be turned down by whomever and have to go to the [Indiana Comprehensive Health Insurance Association] to get coverage, where you're paying as much as hemophiliacs and AIDS patients," Torr said. That's just ludicrous."
The Legislature created ICHIA, the state's high-risk pool, in 1981 to provide health insurance to consumers who are unable to get coverage in the private market.
Steve Fero, a partner at the downtown Career Solutions Group Inc., a human resources recruiting firm, is all too familiar with ICHIA. His father-in-law, who operates a small property-management company in the city, receives coverage through the association due to a neurological disorder.
Fero keeps a watchful eye on government insurance issues, as he's seen costs to insure him and his handful of employees rise nearly 50 percent over the past two years.
"What this waiver bill does is allow an insurance company to say, 'We won't cover the neurological disorder, but if you want to sign this waiver we'll write you a policy,'" he said. "I think maybe the legislators have gotten the message that we're ready for some changes."
Indeed, Torr's bill zipped through the House on a 76-14 vote. The competing version, introduced by Sen. Patricia Miller, R-Indianapolis, passed unanimously, 47-0.
Torr has been a proponent for the change ever since former Department of Insurance Commissioner Sally McCarty had state statute changed to disallow the waiver practice in the late 1990s.
Torr's proposal is less restrictive than Miller's; her bill would require insurance carriers to fund pre-existing conditions after five years of the initial coverage. Torr's version does not address the time issue. The insurance industry would be more open to favoring a bill with no time limit, he said.
Marty Wood, spokesman for the Indiana Insurance Institute, concurred with Torr, although he said some within the industry would accept the five-year moratorium just to get something on the books. Insurance carriers favor the waiver bill because it would create a new market for them.
"The waiver actually does create a system whereby insurance companies can sell more policies," Wood said. "Right now, a lot of these people are just uninsurable. [Carriers] cannot afford to take on the risk of what that ailment might be."
Wood considers the issue among the top five priorities of the insurance industry this session.
The matter has the support of Gov. Mitch Daniels, who listed the ability to waive pre-existing conditions among his objectives to improve the state of health care in Indiana.
Affordable health insurance is the greatest concern for the National Federation of Independent Business, said Jason Shelley, director of the NFIB's state office. While an unrelated effort to strip insurance policies of mandated coverage in order to cut costs takes precedence among NFIB's membership, Shelley is also watching the waiver issue.
Because it affects individuals, the "mom-and-pop shops" would be affected, Shelley said.
"It beats having nothing at all, and that's what a lot of Hoosiers have to deal with now," he said. "It's all or nothing."
Federally, the NFIB has thrown its weight behind an Association Health Plan initiative. Legislation has been introduced in both the House and Senate that would allow small businesses to band together across state lines, through their membership in an association, to purchase more affordable health insurance. Unions and corporations already have the ability to do so, and passage of AHP legislation would level the playing field for small business, the NFIB contends.
The House has passed the legislation numerous times in past years. The Senate introduced a similar measure Feb. 16.
Career Solutions' Fero supports the actions but remains cautious about whether any of the efforts will make much of a difference.
"I don't know where it ends," he said. "I think our costs will still go up and coverage will be reduced."