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Sunday, August 15, 2010

Ind. Gov't. - "Some States Are Lacking in Health Law Authority"

So report Robert Pear and Kevin Sack in this August 14th NY Times story. Some quotes:

WASHINGTON — Faced with the need to review insurance rates and enforce a panoply of new rights granted to consumers, states are scrambling to make sure they have the necessary legal authority to carry out the responsibilities being placed on them by President Obama’s health care law.

Insurance commissioners in about half the states say they do not have clear authority to enforce consumer protection standards that take effect next month.

Federal and state officials are searching for ways to plug the gap. Otherwise, they say, the ability of consumers to secure the benefits of the new law could vary widely, depending on where they live.

Meanwhile, state governments that have for years allowed insurers to set premiums virtually at will are gearing up to establish procedures to review rate increases.

Under the new federal standards, insurers generally must offer coverage to children under 19 and must allow adult children up to age 26 to stay on their parents’ policies. Insurers cannot charge co-payments for preventive services or impose a lifetime limit on benefits; must allow consumers to appeal a denial of benefits; and cannot rescind coverage, except in cases of fraud or intentional misrepresentation.

States have the primary role in enforcing many of the new standards. If a state fails to enforce a standard, the federal government will step in to do so — as it did in several states after passage of a health insurance law in 1996.

The federal government recently surveyed states to assess their enforcement capabilities, and the results suggest a patchwork of protections.

California, Florida, Hawaii, Michigan, Nebraska, Oklahoma, Virginia and Wyoming, among other states, said they did not have authority to enforce federal law.

Some state regulators said they would ask state legislators to expand their authority by putting the federal standards into state law next year. Others said they would rely on their powers of persuasion, the good will of insurers or general state laws that ban unfair or deceptive trade practices. * * *

Thirteen states currently have no authority to review proposed health premium increases for most forms of coverage, according to the National Association of Insurance Commissioners. About a dozen have limited power to review increases after they take effect, while half the states require some form of state approval.

With insurers proposing heavy rate increases this year, possibly in anticipation of tougher regulation, several states have exerted their rate review authority with new vigor.

Sandy Praeger, the Kansas insurance commissioner and chairwoman of the health committee for the National Association of Insurance Commissioners, said states were eager to toughen their procedures to ward off federal interest in obtaining that authority. “The pressure is on us to prove that what we do is effective, and for states that don’t have the authority to get it done,” Ms. Praeger said. Many states will require legislation to change their rate review systems, she said.

Here is a survey on state authority -- Indiana may not have responded. Here is the cover letter, from the National Ass'n. of Insurance Commissioners.

Here is another story, this one from Noam N. Levy of the LA times, headed "State regulators can often do little to control what insurers are charging." It begins:

WASHINGTON -- As Americans struggle with double-digit hikes in their health insurance bills, millions are coming up against a hard reality: the state regulators who are supposed to protect them can often do little to control what insurers are charging.

In many states, it is the insurance industry that largely control the regulatory process, funneling money to key state lawmakers and squelching efforts to expand government oversight of premiums, a review of state regulations and campaign donations shows.

"The pressure that the industry can bring to bear in state legislatures is unbelievable," said J. Robert Hunter, a former insurance commissioner in Texas. "They pretty much get what they want."

Posted by Marcia Oddi on August 15, 2010 01:00 PM
Posted to Indiana Government