States Clash With D.C. Over Health Insurance Premiums

Some states are fighting a move in Congress to centralize federal power over health insurance premium rate reviews.
by | July 8, 2010
 

Some states are fighting a move in Congress to centralize federal power over health insurance premium rate reviews.

Spearheaded by California Sen. Dianne Feinstein, the legislation, known as the Health Insurance Rate Authority Act, would grant the secretary of Health and Human Services the power to approve, deny or modify premium rate increases in 23 states -- those states where commissioners do not already hold regulatory authority.

Some state insurance commissioners, including California's, opposes the measure.

Darrel Ng, press secretary for the California Department of Insurance, told Politico:

"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."

America's Health Insurance Plans spokesman Robert Zirkelbach also told Politico:

"Massachusetts is an example of what could happen if rate review is divorced from objective standards; the rate review process becomes politicized."

Zirkelbach added that a spike in rates could mean that younger, healthier people would be more likely to drop their health insurance, especially during a weak economy.

States like New York and Maine that will not be affected by Feinstein's bill still have the burden of proving the premium rates are not excessive -- which is a task in itself.

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