California Department of Insurance Issues a Series of Notices to Insurance Companies Pertaining to Continued Health Care Coverage During the COVID-19 Outbreak

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By Brittany Hodgson

On March 18, 2020, Insurance Commissioner Ricardo Lara issued a public notice requesting that all insurance companies operating in California provide their insureds with at least a 60-day grace period to pay premiums so that policies are not canceled for nonpayment in the midst of the COVID-19 pandemic and corresponding economic crisis.  On the same day, he issued a second notice, which he specifically addressed to automobile insurers and related licensees in California. The notice also cites a March 16, 2020 statement from the California Department of Motor Vehicles (DMV), asking law enforcement to exercise discretion when enforcing drivers’ license and vehicle registration expirations to prevent at-risk individuals from visiting DMV field offices over the next 60 days. Commissioner Lara stated that “we must do everything we can to ensure that consumers and their families maintain insurance coverage protection during this public health pandemic.”

Also on March 18, Commissioner Lara, noting the pandemic’s immediate potential to displace insureds within the meaning of section 10112.95(b) of the Insurance Code, directed all health insurers to submit a notification by March 20, 2020, describing how the insurer is communicating with potentially impacted insureds, and summarizing the actions the insurer is taking to ensure that the health care needs of insureds are met.  Specifically, the notification must include information demonstrating that insureds have access to medically necessary health care during the COVID-19 outbreak, including policies pertaining to suspension of prescription drug refill limitations and waiting periods; ways in which insurers will cover medically necessary treatment for COVID-19; plans to maximize the use of telehealth in appropriate settings; and how insurers will minimize disruptions in operations and facilities located in jurisdictions with shelter-in-place orders. In a March 18 press release, the Commissioner stated, “we are directing health insurance companies to work with us to guarantee access to care for our most vulnerable during these extraordinary times.”

Following Governor Newsom’s proclamation of a state of emergency on March 4, 2020, Commissioner Lara directed all health insurance companies to waive cost-sharing for screening and testing of the disease in a Bulletin released on March 5, noting that the Department “wants to ensure that cost does not create a barrier for consumers receiving medically necessary screening and testing for COVID-19.” Additionally, the Department reminded insurance companies of existing California laws that require them to provide coverage for all medically necessary emergency care without prior authorization, regardless of whether that care was provided in-network; comply with utilization review timeframes for approving requests for urgent and non-urgent services; ensure that provider networks are adequate to handle an increase in the need for health care services; and ensure that insureds are not liable for unlawful balance bills from providers, including balance bills related to testing of COVID-19.  The Department also strongly encouraged insurers to waive all prior authorization requests for services related to COVID-19, or at a minimum, respond to requests more quickly than the time frames required by law, and to proactively ensure that consumers can access all medically necessary screening and testing of COVID-19, including expanding telehealth services where appropriate to limit people going into hospitals for care.

In a March 20, 2020 press release, Commissioner Lara encouraged uninsured Californians to purchase health insurance through Covered California, noting that the state’s health insurance benefits exchange would be open for special enrollment of uninsured individuals from March 20 through June 30, 2020. Commissioner Lara announced, “Getting coverage for yourself and your family has never been more vital. Californians need to plan for the long term and having insurance at this time can give you peace of mind.” Consumers can visit www.CoveredCA.com and use the Shop and Compare Tool to find out if they are eligible for medical coverage or financial help.

 

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