The House Committee on State Insurance met on March 9, 2021 to take up a number of bills. This report covers HB 643 (Raymond), HB 317 (Murr), HB 205 (Ortega), HB 410 (Johnson, J), and HB 113 (Oliverson).
This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
HB 643 (Raymond) – Relating to disclosure of a beneficiary to a funeral director under a life insurance policy
- Raymond – brought this bill last session and it did not make it through
- About honoring the wishes of individuals who pass away by allowing their family to access funds for funeral arrangements
- Bill allows funeral director to receive information on policies so they can pass message to beneficiary
- Paul – Are you wanting them to disclose that they have a policy for sure, or would they director know there is a policy and disclose beneficiary?
- If he doesn’t know he doesn’t know. Most times they become aware of policies through insurance companies and need to know the beneficiary to move forward
Jay Thompson, Texas Association of Life and Health Insurers – Against
- Primary concern is wording being too broad; applies to every type of company and insurance
- Owner of the policy names the beneficiary and insurance company is contractually obligated to pay the person named by owner; Owner and insured are not always the same person
- Bill needs to be narrowed in some way; applies to too many kinds of policies and there are privacy concerns
- Insurance companies already have a duty to look up beneficiaries and inform them of policies; if beneficiary doesn’t place a claim money is paid to state
- Willing to work with Raymond, but passing it in current form could have unintended consequences
- Stanford? – Could you explain more about how it could play out negatively?
- Provides example of husband in nursing home who purchased insurance in wife’s name; husband was not mentally capable of signing required forms and children disputed
- Ended up filing interpleader to settle
- Stanford – so any negatives you are disputing with this bill could potentially already be occurring?
- Yes, you also see situations where the beneficiary could be a divorced spouse which can lead to legality and family code issues
- Romero – you mentioned insurer’s duty to look up policies but after 90 days funds can go to state? What does the process look like for someone who doesn’t know?
- Social Security Administration has a master list of deaths, Insurance companies must take the list and compare it with their policy list regularly
- Occasionally there are people with similar names; older policies lack info to distinguish but most new policies don’t have this problem
- Done on a weekly basis
- Romero – how often do they look it up and find someone has been dead 30 or 90 days?
- Since 2018 most of the large companies have done this voluntarily and pay beneficiaries
- All companies required to do this
- Romero – what is the procedure today and how often could a notification come late once families have spent out of pocket?
- Funeral directors generally expect payment in a matter of a few days
- For this process, companies run the list through their computers and see if there is a hit
- In majority of situations, individuals can see life insurance payments receipts and can call to receive payment, which expedites process (sometimes within 5 days)
- Oliverson – Sounds like there are 2 different scenarios; policies with benefits on death for funeral expenses and a policy that doesn’t. Privacy notwithstanding, shouldn’t someone know if they are providing a service for which someone is entitled compensation?
- The beneficiary is the only person who can make the claim or payment; in more instances than not the companies are providing that information to family members
- Fundamental concept of the bill should be addressing privacy exceptions
- Oliverson – so do we have clauses in life insurance for situations like this? Don’t want to put unnecessary barriers towards applying coverage.
- Most funeral directors have a license to sell policies to cover funeral expenses through their home; no requirement of funeral director to get permission from family before doing this
- Paul – You talked about companies having policies for 40 years and not realizing the person was dead; how does that happen? Is someone making payments?
- Policies could be paid for in cash assets before or people could pay for it to continue after being warned of lapse
- In situations where insured dies during lapse, beneficiary is contacted, or money is paid to state
Jason Harrell, Harrell Funeral Home and Texas Funeral Directors Association – For
- Discussion of insurance that can be handled within Funeral home, we are aware
- This addresses life insurance policies; oftentimes these policies are lost, family can know of a policy but remain unsure of beneficiary
- Process is often delayed and additional stress is placed on families unnecessarily
- We are asking for nothing else than name of beneficiary to aid the family in filing claim
- Israel – Anxious to move this bill forward. You are saying that beyond being paid, you want to be helpful to families in stressful times and you would help to relook at the language?
- Yes, end goal is to get the life insurance money to beneficiaries so the family can have means to pay expenses
- Israel – in a crisis time, some have a credit card some don’t, you’re a conduit to lower stress?
Gene Allen, Funeral Homeowner – For
- This bill is straightforward and simple, will help families if passed
- Typically, funeral arrangements and services begin before insurance policies can be discussed with families
- Families communicating with insurance companies produces additional stress to reach the same end result: finding the beneficiary to access funds
- Without taking an assignment from the insurance company, there is no guarantee funeral homes are paid
Gary Shaffer, Texas Funeral Directors Association – For
- Good idea of how directors face this problem every day; this is not an unusual situation
- Can take 3-5 business days or a week; not acceptable to wait a week to begin arrangements and services
- Oliverson – what is the average cost of a funeral in Texas?
- Last I saw, funeral home portion is $8,500.; there are many more that are expensive
- Could quickly be a $10,000 expense
- Romero – does the family ask or give you consent to talk to insurance companies? Written?
- Yes, they ask, not written form
- If it would expedite this to have a standard form for companies we would do that, but would still need to know who the beneficiary is to get their signature
- Romero – excuse my ignorance but there’s no way for families to check-in online?
- Not that I know of
Closing – Raymond
- For the record Mr. Thompson did not share any information with us prior to the hearing. His examples didn’t make sense to me
- This is not about funeral homeowners getting paid, it’s about respecting the person who passed away
- Most times funeral arrangements center around what can be afforded, life insurance companies need to disclose available policy
- Current process is painful and does not make sense
HB 643 is left pending.
HB 317 (Murr) – Relating to prohibiting discrimination against living organ donors by certain insurers
- Amends chapter 544 of Texas Insurance Code; asks healthy living owner donors not to be discriminated against or penalized due to their decision
- Paul – Are you saying they cannot penalize those who have given organs?
- This applies to a living individual who has chosen to give up an organ, is completely healthy, and being penalized by insurance companies.
- Oliverson – so you are saying being a living owner donor cannot be the only reason you are penalized?
Kent Bressler, National Kidney Foundation – For
- Received a kidney from his brother, which allowed him to live a full and healthy life
- Chronic kidney disease affects 37 million Americans, 90% do not know they have it
- Nearly 50,000 Texans are on dialysis; transplant is the only lifesaving treatment
- High demand for kidney, roughly 8,500 Texans are on the waitlist, averagely takes 5-7 years
- 1/3rd of donations come from living donors, who go through extensive testing to make sure they are healthy; kidney will not be removed if doctors think it will change donor’s health
- HB 317 protects necessary services of living donors; should not face economic hardship or penalties
Mary Raines, National Kidney Foundation – For
- Kidney transplant recipient, donor has not been able to receive insurance from prospective jobs or bring prior insurance with her
Closing – Murr
- Respectfully request your favor
HB 317 left pending
HB 205 (Ortega) – Relating to safety requirements for amusement ride operations
- Ortega – requires amusement park workers be 16 years old, trained on particular ride, not operate more than one ride at once, and not be intoxicated
- Common sense safety requirements that mirror best practices and other state laws
- Updates safety requirements from 1989
- Oliverson – does your bill help to prevent deaths from happening in amusement settings?
- Absolutely, there is very little regulation, and these are simple things that can be done
HB 205 is left pending
HB 410 (Johnson, J) – Relating to preauthorization of certain benefits by certain health benefit plan issuers
- J Gonzalez – Seeks to prohibit prior authorization for certain mandated benefits, incl. low-dose mammography, breast reconstruction, inpatient care for mastectomy, lymph node dissection for breast cancer, diabetes equipment, bone mass measurement, prostate cancer screening, etc.
- Requiring PAs can delay care and be harmful
Dr. Debra Patt, Texas Medical Association, Texas Oncology – For
- PAs can be a challenge for any patient trying to get needed care, increases admin burden & payment is conditioned on approval
- PAs can be a deterrent for appropriate care, TMA survey showed 91% of physicians saw delays, 75% say can lead to abandonment of treatment, 40% pay out of pocket, 15% go without care
- If the services in HB 410 can avert PA process it will reduce barrier to get appropriate care
- Oliverson – What is a typical delay on basis of PA for these cancer treatments?
- Depends on service, can be a day, more typically a week, can be several weeks
- Particularly for breast reconstruction, have heard patients delay care
Jamie Dudensing, Texas Association of Health Plans – Against
- Strong patient protections in place that put in place limits to prior authorization delay
- 1/3 of all health care considered waste; 30% of health care is either unnecessary or could cause harm on some of these pieces
- You can reduce paperwork by just getting rid of paper; electronic
- To just eliminate Prior Authorizations undermines an important patient protection
- Last thing public needs is another government mandate
- Oliverson – takes example, asks for more details; delay in treatment for cancer impacts recovery and can result in increase mortality
- Oliverson – If someone is having a reconstruction after a mastectomy this is reconstructive, correct?
- In the fully insured market, all PA protocols must be transparent and on the website, physician can report that; couldn’t find this example
- Oliverson – With some things like diabetes supplies I can see the concern items are used elsewhere, but with cancer treatment and screening delays can result in increased morality
- Mandate applies to breast reconstruction
- Oliverson – Could apply to breast reconstruction following a mastectomy
- Paul – How many PAs are turned down? 80%? 20%?
- Will need to look at data, less than 25% of services have a PA, denials 3%
- Can be immediately expedited for appeal, would not impact care
Dr. David Fleeger, Colon & Rectal Surgeon, Texas Medical Association – For
- Covers statistics of colon rectal cancer, common condition
- Several health plans require prior auth for colonoscopy, can appeal but those are rarely successful
Bill Hammond, Texans Employers for Insurance Reform – Against
- Goal of org is to ensure more Texans receive insurance at their workplace; concerned bill will increase cost of health care
- This would impact small businesses, struggling to maintain health insurance for their employees
- CMS has stated PA is critically important to ensure appropriate care is delivered
- Caption of the bill is very wide open
Carl Isett, Texas Association of Benefit Administrators – Against
- HB 410 will raise the cost, bypasses all cost control measures in place
Shannon Merony, Texas Association of Health Underwriters – On
- PAs are an important tool to hold down health care costs, addressing waste & abuse
- PAs can also cause a hassle factor for patients, TAHU typically does not hear these issues on conditions HB 410 addresses, hear them more with diagnoses
John Flores, Texas Medical Association – For
- Diabetes care has significantly improved with new treatments; research has shown PAs cause delays in treatment without improving patient care
- Shares anecdotes of patients whose care was delayed unnecessarily by PA process; no evidence that PAs improve quality of care
- Israel – Specifically regarding diabetes under the bill, what has been your experience getting PAs for supplies and training?
- In general, we try to use glucose monitoring that is simple for the patient, 24-hour monitoring is new and often denied
- Most almost give up trying due to hassles getting approval
- Israel – Typically denied?
- New tech that is more helpful typically is
- Israel – So those patients would need to pay out of pocket?
- Yes, but typically they use more traditional daily tests
Stephen Seiler, Texas Medical Association, Texas Radiological Society – For
- Breast cancer screening typically requires abnormality workup, PA process can be a long wait and some women never return
HB 410 left pending
HB 113 (Oliverson) – Relating to peer-to-peer car sharing programs.
- Obvious issues arise out of peer-to-peer car sharing with insurance; HB 113 follows national model followed in other states and being considered in others
- Committee substitute is being worked on with perfecting changes
John Van Arsdell, Avail – For
- HB 113 would help establish regulatory framework with critical insurance and consumer protections
- Recently agreed to by the NCSL
Beeman Floyd, Texas Coalition for Affordable Insurance Solutions – For
- Biggest concerns are always in situations where people think they have insurance when they don’t, HB 113 does a good job of covering the gap
- Substitute has small clarifications
- Paul – You support the bill, but want the substitute measures?
- Yes, just small clarifications
John Schnautz, National Association of Mutual Insurance Companies – For
- Setting up framework for insurance in peer to peer, bill establishes that peer to peer platform is obligated to ensure coverage is there; does not specify how
- All changes in the substitute address that companies know what they are writing
Rep. Oliverson closes
- Lays out and withdraws committee substitute to fulfill procedural req
HB 113 left pending