Diabetes Pump Adventure
Up until this point, I have not written about our attempt to get an insulin pump for Grayson. It currently appears that the insurance policy through my employer treats insulin pumps as durable medical equipment. As an additional kicker, they treat all the supplies for the pump as durable medical equipment as well (even though the supplies are disposable). The policy has a limit of $2500 per year on durable medical equipment. The pump costs nearly $6000 and the supplies for the first year will cost approximately $2600. So our total cost out of pocket would $6100 for the first year.
As we prepare to file an appeal with the insurance company I was researching how state laws (and the Insurance Commissioner) might could assist in the appeal. But as it turns out, I found that employer self-funded plans are not subject to state laws regarding insurance coverage based on a federal law known as ERISA.
The American Diabetes Association has worked to pass health insurance provisions in 46 states that require fully insured health plans — those regulated by state governments — to provide coverage for diabetes medications, supplies, and services. These laws do not apply to policies that self-insure, as they are regulated through ERISA and the federal government.
I am all for hands-off government and freeing businesses to function with as little interference as possible. The problem with ERISA is that it creates a loophole for larger businesses to escape the state law requirements. This is especially bad since ERISA offers no guarentee for coverage of anything related to diabetes. Certainly this makes things simpler for the businesses that operate in many different states. I think this has to be an instance where a lot of folks would agree that the federal law is too intrusive into states’ rights issues (by trumping the state laws). So while it certainly helps businesses, it only helps larger businesses that can afford the risk of going with a self-funded plan. Again, this doesn’t seem like a level playing field as obviously small businesses have to meet the more strict state law requirements (because they end up purchasing fully-funded insurance plans) that end up costing them more money not just because the business is smaller but also because they have to meet the more stringent requirements. So basically, we are at the mercy of the appeals board at this point.