- Governor David A. Paterson
announced he has signed "Ian's Law" into law, which will enhance protections for consumers in case a health insurer or health maintenance organization (HMO) discontinues a class of policies or contracts. Governor Paterson was joined by the Pearl family, Senator Eric Schneiderman and Assemblyman Daniel O'Donnell in highlighting the passage and enactment of this legislation.
"With this legislation, New York consumers have one more weapon in their arsenal of legal defenses against unscrupulous insurance practices," Governor Paterson said. "Inspired by Ian's courageous fight, this law fortifies consumer protections in the event a health insurer terminates coverage without offering a replacement. Namely, this law will prevent insurance companies from discontinuing an entire class of policies as a pretext to avoid paying one person's medical claims."
Bill S.6263-C/A.9243-B, known as "Ian's Law," will amend the New York State Insurance Law to require insurers to certify the following to the Superintendent of Insurance:
• Written notice of pending discontinuation has been provided to all insured individuals covered by a group plan at least 90 days prior to the date of discontinuation of coverage.
• All policyholders under a discontinued plan have been sufficiently notified of their option to purchase alternative, replacement health insurance products offered by the insurer.
• A group plan has not been discontinued specifically to drop an individual high-cost policyholder from the plan.
This bill, effective January 1, 2011, also establishes 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 of their group plan keep their present coverage if similar coverage is not made available in the insurer's replacement plan. It will not affect State finances.
Senator Eric Schneiderman said: "Because of Ian Pearl and his courageous family, New York State is now putting patients before insurance company profits. The practice of terminating an insurance policy line as a pretext to dropping coverage for individuals who need it most is not only unconscionable - it's a matter of life and death. 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."
Assemblyman Daniel O'Donnell said: "Ian's Law closes the loophole that has endangered the lives of so many vulnerable New Yorkers like Mr. Ian Pearl, and allows our State to protect these individuals from the abuses of insurance companies. Contrived money-making schemes must not dictate who receives medical coverage."
The legislation resulted from the experience of Ian Pearl, who suffers from muscular dystrophy and requires 24-hour nursing care. While Ian's insurer initially provided coverage for 24-hour care, the insurer later terminated the coverage without providing a replacement policy that covered Ian for this treatment. In response, Mr. Pearl and his family filed a lawsuit against his insurer, advocating for the rights of the insured at a time when the national discussion of federal health care reform has focused intensely on the relationship between insurers and their customers. Although the court upheld the discontinuance, Ian's lawsuit against his insurer later revealed that the group health plan through which his coverage was provided was canceled as a pretext for discontinuing his high-cost coverage.
New York State has been a leader in consumer protections, due to Governor Paterson's efforts throughout his term. In June 2010, the Governor signed his Program Bill No. 278, which is part of his successful health insurance reform agenda and requires health insurers and HMOs to make an application to the Insurance Department to implement premium increases.