Written by Michael Moran on July 6, 2010 – 6:28 am
Gloria Park writes in Politico that many states are resisting federal attempts to set health insurance rates.
‘Some state insurance commissioners are pushing back against a renewed effort on the Hill to centralize the authority of health insurance premium rate reviews under the secretary of Health and Human Services.
The Health Insurance Rate Authority Act, introduced by Sen. Dianne Feinstein (D-Calif.) on March 4, would grant the HHS secretary the power to approve, deny or modify premium rate increases in states — 23 at the moment — where insurance commissioners do not already have that regulatory authority. Feinstein has crusaded for this cause since the omission of an amendment in the recently signed health care law.
“This legislation we have introduced simply creates a federal fallback,” Feinstein said in a June 21 speech on the Senate floor, emphasizing the limited jurisdiction of her bill. “In some states, insurance commissioners already have that authority, and that is fine. The bill doesn’t touch them.”
California, which would be affected by Feinstein’s proposal, opposes the measure, according to Darrel Ng, press secretary for the California Department of Insurance. “First of all, our insurance commission is Republican and opposes prior approval for health insurance rates at a philosophical level.”
On a practical level, he added, federal prior approval would not be a welcome idea. “The people who are in charge of making sure companies have enough money to pay their claims should be the same people that review premium rates.”
California has a bifurcated regulatory system in which the Insurance Department regulates preferred provider organization policies, while the Department of Managed Health Care oversees health maintenance organization policies. The Insurance Department has been in the limelight after Anthem Blue Cross increased its premium rate by 39 percent.
Industry lobby America’s Health Insurance Plans opposes centralizing rate review authority in the federal government as well, said spokesman Robert Zirkelbach.
“States have the infrastructure, experience and expertise to review premiums,” said Zirkelbach, citing Massachusetts as a replicable scenario if premium rates cannot keep up with “skyrocketing medical costs and the impact of younger and healthier people dropping their insurance during a weak economy” — the driving factors behind rate increases, according to Zirkelbach.