Task force studying statewide AIDS-related health insurance issues readies new report.

Giving the California Department of Insurance jurisdiction over all HMOs and new powers over the insurance industry are some of a number of recommendations made by a panel of Californians battling for the rights of HIV-positive individuals.

The HIV Task Force was created by California Insurance Commissioner John Garamendi last September and is expected to issue a report on health insurance reform by the end of this month. According to task force members, the initial draft of the report has recommendations that could mean a major changes in health insurance law to benefit not only people with AIDS or its antecedent, but anyone with a catastrophic illness.

The group is made up of members of groups like AIDS Project Los Angeles and the San Francisco AIDS Foundation, as well as attorneys and consultants who have represented people with AIDS who have been denied insurance, said Walter Zelman, special deputy of health insurance for Commissioner Garamendi.

"It was Commissioner Garamendi's idea to form an HIV Task Force because of the volume of complaints the department was getting" from those with the virus, said Alice Philipson, an attorney who represents consumers against insurers and a founding member of the AIDS Legal Referral Panel in San Francisco.

Although the panel members are experts in AIDS-related matters, their recommendations address the problems that anyone with a catastrophic illness has in getting and retaining insurance, Philipson said.

"The biggest problems are access to insurance, affordability of insurance and loss of insurance," Zelman said. "Most insurers will do everything they can to avoid people who are at risk (of developing a catastrophic illness) and then they'll do what they can to get rid of them."

One of the problems the committee has encountered is that only about 25 percent of the state's insured are covered by companies which fall under the jurisdiction of Garamendi's office, said Jacques Chambers, insurance expert for AIDS Project Los Angeles.

Attorney Philipson said jurisdiction for all insurance companies should fall to the Department of Insurance, rather that the Department of Corporations, which regulates many HMOs and some insurance companies, for many reasons.

Among them, she said, the Department of Insurance has an elected commissioner, a legal department which specializes in insurance issues and a consumer hotline.

Aside from restructuring the regulation of health insurance, the group also has proposed reforming small-group insurance coverage.

"The effect of what they've recommending really transcends HIV issues," said Brent Barnhart, legislative affairs director for Blue Cross of California who attended task force meetings in an advisory capacity.

The recommendation on reforming small-group insurance would, among other things, prohibit insurers from discriminating against small employers who have an employee with AIDS or other costly, catastrophic illnesses.

Under the proposal, insurers could not deny a company insurance because a high percentage of employees in that business are gay men or because it is located in a city with a large gay population, Barnhart said.

"You can't say this is a gay hairdresser in San Francisco," and deny insurance, Barnhart said.

Another provision is that once insurance is issued and an employee of the small employer contracts AIDS or another catastrophic illness, the insurer could not cancel the insurance, Barnhart said. There would also be a rate hike ban put in place, so the insurer would not be able to raise the price of the group plan to the point where it would be prohibitive for the small business to pay the price.

In addition, the plan proposes putting a cap on the amount of time an insurer can place on not insuring a member of the group who has a pre-existing medical condition, Barnhart said.

In the long-range, the task force has come out in favor of universal health insurance, as proposed by Garamendi. The insurance commissioner last month unveiled a plan which would provide health insurance to all Californians through a private-public partnership of employers, government and consumers.

Under Garamendi's plan, employers would pay 6.75 percent of payroll into the system and employees would pay 1 percent of wages. Garamendi's plan would have to be adopted by the Legislature and if passed, would not become effective for several years.