Bills target insurers on organ transplants
Insurance coverage for organ transplants is subject to separate caps on benefits and redundant waiting periods that apply to no other major medical procedures. Three bills are pending in Olympia that would eliminate the coverage exceptions for transplants.
Seattle Times health reporter
TO READ ABOUT and track the progress of the transplant bills, visit www.leg.wa.gov/legislature.
Transplant waiting period: SB5236 and HB1308
Transplant benefits cap: SB5725
Richard Murakami never thought he'd have to make a $400,000 deposit for his infant daughter's liver transplant — not when his family had full insurance coverage with Regence BlueShield.
But caseworkers at Lucile Packard Children's Hospital at Stanford University told Murakami that his policy's $250,000 cap on transplant benefits wasn't enough to cover both the cost of Madeline's operation and any subsequent complications.
So the Seattle architect and his wife, Karen, raised the money from family and friends and through bake sales and other fundraisers, and Madeline received a portion of her mother's liver in 1999.
She grew into a spirited, wispy girl, but died at age 9 in 2008 while preparing for a second transplant.
Even a decade later, Murakami recalls his dazed shock at learning that his insurance coverage for his only child was inadequate.
"You just never realize the fine details of insurance policies," said Murakami, 50.
The Murakamis were tripped by a singular loophole that applies only to organ transplants. Unlike other major medical treatments such as heart surgery or chemotherapy, transplants often fall under a separate coverage limit that's far below a policy's overall lifetime cap.
A bill before the state Senate now is aiming to eliminate that fine print.
At the same time, lawmakers have introduced two related bills outlawing a special waiting period for transplant coverage that even insurers widely concede is unfair.
Taken together, the measures amount to the most concerted push yet in Washington to overturn what critics say are antiquated exclusions for transplant coverage. The rules date to the 1980s, when organ transplants were much riskier procedures than they are today.
The state's three largest health insurers — Regence, Premera Blue Cross and Group Health Cooperative — support banning the special waiting period. But they remain cool to the idea of eliminating the cap on transplant benefits, saying that it could drive up premiums for all.
Premera announced Wednesday that it would support increasing the cap to $350,000, if it's made standard across all insurers.
Sean Corry, a Seattle insurance broker and longtime consumer advocate, contends that singling out transplant patients is an outdated policy with life-or-death consequences.
"It's amoral — it's just how the market developed," Corry said. "But when it is imposed on individuals, it is disastrous."
Discount for insurers
Organ transplants are among the most expensive of medical procedures.
In 2007, total bills for a liver transplant during the first year averaged $520,000, and $660,000 for a heart transplant, according to Milliman, a Seattle-based actuarial consulting firm.
Kidney transplants, considered almost routine, are among the least expensive, with an average cost of $246,000 nationally.
Insurers typically receive a discount of about 30 percent off those billed charges from hospitals that belong to their networks, said Richard Hauboldt, principal in the Milwaukee office of Milliman.
Even so, Hauboldt said, the caps often don't cover the cost of many major transplants such as bone marrow, lung or heart.
Regence, Premera and Group Health cap transplant benefits at $250,000 per patient. A few small players in the state, including United HealthCare and Kaiser Foundation Health, do not have separate caps on transplants.
The caps mostly haven't budged since the early 1990s, even as medical inflation drove many insurers in recent years to double the overall lifetime benefits limit on most policies to $2 million.
In 2007 and 2008, 16 patients covered by Premera had transplants that exceeded $250,000 but were less than $350,000, said Jodi Coffey, a spokeswoman for the Mountlake Terrace-based insurer.
In addition to supporting raising its cap, Premera favors adjusting it upward annually for inflation, Coffey said. But the insurer does not believe that the cap should go away entirely.
"We think that setting a limit for the maximum coverage is the appropriate approach," Coffey said.
Nancy Ellison, legislative director for Regence in Seattle, said before Premera's decision that her company remains unclear about how a higher cap would affect premiums, saying "we still need to do the math."
But after hearing about Premera's announcement, Ellison said the higher cap seemed like a reasonable amount. "After consideration, we are willing to support that amount as well," she said.
John Scanlon, a retired federal investigator from Kent who received the heart of a 21-year-old woman in 2000, said he believes a separate cap for transplants is misguided.
Scanlon, 60, helped to persuade state Sen. Karen Keiser, D-Kent, chair of the Health & Long Term Care committee, to sponsor a bill that would do away with the cap.
With only about 500 organ transplants annually in Washington, Scanlon said, he knows "there is not much of a lobby" behind the bill. Scanlon, who came close to dying three times, said patients shouldn't have to risk bankruptcy — or their lives — for lack of adequate coverage.
What if "they transplanted me before you because you were $500,000 short of cash?" Scanlon asked.
By contrast, the major health insurers firmly support legislation to eliminate special waiting periods for transplants.
To prevent people from buying policies only after a diagnosis, insurers commonly exclude coverage for three to nine months for pre-existing conditions such as pregnancy or cancer.
But for transplants, insurers are permitted to impose a separate waiting period of up to 12 months — even without a pre-existing condition and even if the patient had previous insurance.
Last year, a Spokane man who had been waiting for a liver learned two weeks after his employer switched to Group Health that he was ineligible for transplant coverage for six months.
Publicity over his plight led Group Health to reverse its decision, as well as revoke its policy on waiting periods.
Spirit, strength, courage
Murakami, the architect, said his firm twice opted not to switch to a less-expensive health plan precisely because of such worries. Madeline's regular hospitalizations made interruptions in coverage risky.
When Madeline wasn't in the hospital, she loved to ski and skate, delighted in school and relished every chance to strip off her clothes and dash into the water off Alki beach.
"She had the greatest spirit, amazing strength and a whole lot of courage," Murakami said.
After Madeline turned 8, however, her body appeared to be rejecting her mother's liver.
Doctors eventually concluded that she needed a new liver — as well as a kidney. The $400,000 that her family had raised for the first transplant with the help of Children's Organ Transplant Association hadn't been needed, and the Murakamis counted on it for the double transplant.
In February 2008, Madeline was hospitalized with what appeared to be pneumonia. She died two months later, before her second transplant.
Murakami said the unused money will be donated to another family facing a transplant.
Meanwhile, he wants to ensure that organ recipients fighting for their survival need not also worry about how to pay for it.
Passage of the bills "would restore dignity and freedom of choice," Murakami said.
Seattle Times news researcher David Turim contributed to this report. Kyung Song: 206-464-2423 or firstname.lastname@example.org
Copyright © 2009 The Seattle Times Company
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