Health
insurance companies have really ramped up the message machine on dire warnings
of big rate hikes once Obamacare fully kicks in next year. Much of the scare tactic is being delivered
by insurance agents to their clients and other supporters, like me, of national
healthcare reform.
So it’s not
surprising that the Obama administration is going to put the health insurance
companies under a microscope to watch for unjustified rate increases to help
state regulators and alert the public (see
story below). Apparently for 20
years Minnesota has had this policy of companies reporting all rate hikes for
all products to the state regulators and it has paid off for the consumers.
But what about
the states, like South Carolina, that don’t allow their insurance departments to
actually regulate what rates the health insurance companies are charging. What good is having this new information the
Administration is asking for.
My friend, Representative Jan Schakowsky of Illinois, is going to introduce
legislation in Congress to take care of this problem. She wants the federal Department of Health
and Human Services to have the power to protect consumers by denying rate
changes in states where the legislators are apparently afraid to take on the
insurance industry.
Maybe
this move will cause these lax states to act on their own to actually regulate
health insurance companies so the big, bad federal government won’t.
--------------------------------------------------------------------------------------------
The New York
Times
March 3, 2013
Obama Asks Health
Plans to Report Rising Rates
WASHINGTON
— The Obama administration says it will require health insurance
companies to report all price increases, no matter how small, to the federal
government so officials can monitor the impact of the new health care law
and insurers’ compliance with it.
Under
current rules, the federal government requires insurers to report information
on rate increases of 10 percent or more. New rules being issued by the
administration will extend this requirement to all rate increases for all
health plans sold to individuals, families and small businesses — a total of 60
million people.
Federal
health officials said they needed the additional data to monitor trends in
premiums as major provisions of the law take effect and more people buy
insurance.
“The
purpose of this policy is to identify patterns that could indicate market
disruption, which could occur given the additional standards that apply” to
insurance starting next year, the administration said in a justification of the
rules adopted by Kathleen Sebelius, the secretary of health and human services.
Under
the new law, Ms. Sebelius said, she is supposed to “monitor premium increases
of health insurance coverage” inside and outside the regulated state-level
markets known as insurance exchanges.
Consumer
advocates welcomed the new reporting requirements, saying they would enhance
the ability of insurance regulators and the public to scrutinize rate
increases.
Insurers
object to the requirements. The federal government “is creating a hugely
burdensome and expensive reporting system” that duplicates what most states
already require, the Blue Cross and
Blue Shield Association said.
The
reporting requirements generally apply to rate increases sought after the
beginning of next month.
A
fierce debate has erupted over the impact of Mr. Obama’s health care law.
Insurers and employers predict that it will drive up premiums, especially for
healthy people under the age of 35. The White House disputes that prediction
and says that many factors will lead to lower prices.
The
law guarantees coverage for people regardless of pre-existing conditions,
prohibits insurers from charging women more, and limits their ability to charge
higher rates to older people.
Insurers
now often divide consumers into groups. Premiums are often higher and rise
faster for less healthy individuals and groups.
By
contrast, the new law requires insurers to pool the claim costs of all their
customers when setting rates in the individual market in a state. Likewise,
insurers must consider the claims histories of all their small-business customers
when setting rates for them. Premiums for each product are supposed to reflect
the combined experience of all products in the market.
Federal
health officials said they needed to know the prices of all insurance products
so they could determine whether insurers were complying with these
requirements.
If
an insurer wants to increase rates for any product, it “must submit a rate
filing justification for all products” in the same market, the rule says.
“Products can no longer be reviewed as completely unique,” but must reflect the
experience of the entire market.
Julia
T. Philips, a health actuary who works for the Minnesota insurance
commissioner, called this one of the law’s most important consumer protections.
Minnesota has had a similar requirement for 20 years, she said, and consumers
have benefited.
Insurers
say that policies sold under the new federal law will be more comprehensive and
more expensive than what many people have now.
The
White House says the fears of “rate shock” are overblown. Consumers can move
from expensive health plans to more efficient, lower-cost plans, the
administration says. It says critics who focus on premiums do not take account
of other provisions of the law that limit how much consumers will spend out of
their own pockets for health care.
In
addition, the administration predicts that people gaining insurance will, on
average, be younger and healthier than those who already have it, and this
would tend to hold down premiums. Finally, it says, even if premiums increase
significantly, lower-income people will be able to get federal subsidies to
help defray the cost.
Carmen
L. Balber, the director of the Washington office of Consumer Watchdog, a
nonprofit advocacy group, said: “We applaud the administration for the new
reporting requirements. This is a huge step forward.” But she added: “There’s a
loophole. In 10 to 15 states, insurance commissioners have no power to reject
unreasonable rate increases.”
Representative
Jan Schakowsky, Democrat of Illinois, said she would introduce a bill to
provide the secretary of health and human services with power to deny or modify
rate increases found to be excessive or unjustified.
http://www.nytimes.com/2013/03/04/us/obama-to-require-reports-on-health-insurance-prices.html?nl=todaysheadlines&emc=edit_th_20130304&_r=0
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