OBAMA—REPORT THOSE RATE INCREASES OR ELSE

3/6/13
The Obama administration wants health insurance companies to report every price increase, no matter how small, to the federal government so it can measure how insurers are complying with the 2010 healthcare reform law, according to The New York Times.
The government now requires insurers to report rate increases of 10 percent or more. But new rules would require all increases to be reported. Identify patterns that could indicate market disruption. Insurers object, saying the government is creating a reporting system that duplicates what states already require.
The rule also will allow the government to track whether Obamacare drives up insurance costs, as insurers and employers predict. Since the system requires insurers to pool the claim costs of all customers when setting rates, federal officials say they need to know the prices of all insurance products so they can ensure companies are following the law.
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. “The purpose of this policy is to identify patterns that could indicate market disruption, 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. 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. 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, prohibits insurers from charging women more, and limits their ability to charge higher rates to older people.
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. 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. 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. 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. : “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.
Sources—newsmax- sandy Fitzgerald, Robert pear, nyt

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