Panel on AIDS-Related Issues in Insurance Urges Reforms

A task force on AIDS-related insurance issues Wednesday presented Insurance Commissioner John Garamendi with a sweeping list of recommendations that range from providing universal access to health care to reorganizing the Department of Insurance’s consumer service staff.

The 33-member task force, including AIDS activists, insurance and medical professionals, politicians and members of Garamendi’s staff, also called for reforms in small-group insurance law and for granting the insurance commissioner chief authority over health insurance, which is now overseen by numerous state and federal regulators.

Garamendi, in a press conference to accept the report, repeated his support for some form of universal access to health care. However, saying he had just received the report Tuesday night, he did not immediately adopt any of its recommendations.

Although the panic that struck the insurance industry after acquired immune deficiency syndrome was first identified in 1981 has subsided, there remains widespread discrimination against AIDS patients and those identified as “at risk” of contracting HIV, the AIDS-causing virus, the report states.

Many insurers and company benefit plans “continue to attempt to impose a kind of moral judgment in the determination of coverage and payment of benefits for HIV-related charges,” the report says.

For example, the report says, the Laborers Health and Welfare Trust for Southern California refuses to cover AIDS except for “children up to age 13” or those who acquired the disease through a blood transfusion.

Jacques Chambers, insurance specialist for AIDS Project/Los Angeles and principal author of the task force report, said gaps in laws and regulations permit some insurers or companies that administer their own health-benefit plans to drop AIDS patients or drastically limit their coverage.

Among the task force’s most important recommendations are those to revamp small-group insurance, Chambers said.

The proposals include requiring uniform underwriting standards for all insurance applicants; requiring the commissioner to review applications to bar the use of vague or misleading language or unfair disclosure requirements; prohibiting unfair rate increases or policy cancellations. Some of the reforms are before the Assembly.

The task force also suggested assigning medical and legal specialists to the commissioner’s consumer services division to provide more informed responses to AIDS-related complaints.

Bill Robinson, a task force member and independent insurance agent in West Hollywood, dissented from the recommendation for a state-run, publicly financed health care system along the lines of Canada’s. He said it would more than double the state budget and “at best trade one set of problems for another.”

Andrew F. Morrison, an assistant vice president for Pacific Mutual Insurance Co. and task force member, also opposed a state-run health care system and dissented from recommendations that would bring private benefit plans--now overseen by the federal Employee Retirement Income Security Act--under the regulatory control of the insurance commissioner. He called such measures “a ‘wish list’ for the plaintiff’s Bar” that would lead to a flood of lawsuits.

One of the examples of insurance abuse cited by the task force was attacked as false.

The report implies that Blue Shield’s new HMO discriminates by excluding one ZIP Code from its service area: 90069, West Hollywood, a city with a large homosexual population.

“Totally false,” Blue Shield spokesman Mike Odom said Wednesday. “We are serving West Hollywood and have been for well over a year. The only Zip Code in Los Angeles County that we don’t serve as yet is Catalina.”