New York May Stop Heartless Health Insurers from Dropping Coverage When It Stops Being Profitable

Ian Pearl faced death after an insurer canceled his coverage, but "Ian's Law" now lives.

A key New York state senator said Thursday he has introduced a bill named after the severely disabled man that would prevent health insurance companies from canceling lines of coverage to avoid high claims.

"The practice of terminating an insurance policy line as a pretext to dropping coverage for individuals who need it most is not only absolutely disgraceful - it's a matter of life and death," said Sen. Eric T. Schneiderman, New York City Democrat, at a news conference in a Senate hearing room in Manhattan.

Mr. Pearl, 37, thanked the senator via videoconference from his parents' home in Fort Lauderdale, Fla. The victim of muscular dystrophy is unable to travel and requires an electronic device to speak.

"My great hope is that Ian's Law will end up protecting more people than I will ever know, who will never have to go through any sort of battle again because of this bill," he said.

"I pledge to continue my efforts to fight for health care reform that protects the most vulnerable Americans," Mr. Pearl said.

Susan Pearl attended the news conference along with other patients' family members and reform activists. With her husband Warren by her side, Mrs. Pearl said policy cancellations can be a matter of life and death.

"My family discovered that the cancellation of an insurance plan can produce catastrophic consequences. [It] left us with a question about literally how we would be able to continue saving Ian's life," said Mrs. Pearl, who attended a health care reform rally in Washington on Oct. 22 and pressed her son's case with several members of Congress.

Cindy and Steven Kief, of Sleepy Hollow, N.Y., near Westchester, also attended on behalf of their severely developmentally disabled 11-year-old twins, Jake and Jesse, who has had half of his brain removed. Mr. Kief owns a small business.

"Over the years with many carriers, this isn't just one carrier, this is a fundamental problem in the insurance industry, they seek us out, they gun for us, they do everything they can, attempting to drop polices that we have paid for.

"Year after year, month after month, sometimes day by day, we are faced with a phone call telling us that something has changed in our policy or that we no longer qualify for the nursing benefit," Mrs. Kief said.

Coverage for their children has been reinstated, but only until the end of the year, she said.

Like the Pearls, the Kiefs believe their sons would die in an institution.

"Two decades ago, they would have been institutionalized, and they would have been left to rot," Mrs. Kief told The Washington Times after the news conference. She said home health nurses have often saved her sons' lives.

The Pearls moved to Florida because the climate is beneficial for their son. Mr. Pearl's business remains in New York City.

His son has been confined to a wheelchair since he was 6, and hooked to a tracheal tube since he suffered respiratory arrest at age 19.

The Times first reported Oct. 14 that Guardian Life Insurance Co., of New York, had canceled the small business line of coverage that Warren Pearl secured through his construction company, Warren Pearl Construction.

Media attention to the Pearls' case - including coverage on MSNBC and CNN - led Guardian to apologize to Mr. Pearl and promise to continue his coverage indefinitely. Details of that settlement - including how many other canceled policyholders will be reinstated - are still under discussion, said John Fried, the Pearls' attorney.

Guardian Life said Thursday that it supports the law in principle but disputed charges that it canceled its policy lines to eliminate the costs of high-claim customers.

"Guardian agrees with the spirit of the proposed law and the principles of notice and process that it aims to address, but cannot comment substantively on the bill since we have not had the opportunity to review it," the company said.

"We are confident that we acted legally, in full compliance with state insurance regulation, and that at no time did we cancel coverage for an entire block of policies in order to discontinue coverage for any particular individual.

"Guardian has committed to continuing to provide Ian Pearl with the same benefits and coverage that he has had for almost three decades as a valued Guardian customer," the company's statement said.

A spokesman for America's Health Insurance Plans, a health insurance lobbying group, did not return a phone call seeking comment.

A representative of Consumers Union, publisher of Consumer Reports, expressed support for health care reform efforts which would aid vulnerable small businesses like the ones owned by the Pearls and the Kiefs.

"Broadly speaking, this issue is at the heart of the national health care debate," said Chuck Bell, program director for Consumers Union. He praised the bill for giving the insurance department authority to scrutinize policy cancellations.

Dr. David Hannan, president of the Medical Society of the State of New York, also voiced support for the bill.

"Patients and their physicians, in seeking to assure that needed health care will be covered, must deal every day with a whole host of barriers which are imposed by health insurers," Dr. Hannan said. "New Yorkers who have paid for health insurance coverage must be able to count on that coverage."

Ian's Law (S.6263) makes it illegal for insurers to drop entire classes of insurance in an effort to deny coverage to individuals, requires companies to prove to the state Department of Insurance that they are not dropping a line of coverage as pretext for dumping an individual policyholder and expands the minimum length of time - to 18 months - that an insurer must continue coverage for policyholders after the statewide cancellation of a class of policies.

The bill also allows policyholders to protest a cancellation to state regulators.

It is co-sponsored by Sen. Neil Breslin, Albany Democrat and chairman of the Senate Insurance Committee. Mr. Schneiderman is chairman of the powerful Senate Codes Committee, which oversees legislation on criminal justice and civil rights issues.

"I have always said that Ian's life has been a series of miracles," Mrs. Pearl told the small audience of friends and Senate staff. "Ian's Law will be the next one."

Betsy Pisik contributed to this report.


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