: Health Insurance Oversight in the Post-Reform World
Health Insurance Oversight in the Post-Reform World
This year’s passage of the Patient Protection and Affordable Care Act has ushered in a historic change in the way our nation’s health care works. The bill will allow 47 million currently uninsured Americans to enter into the health care system, and prevent health insurers from denying coverage based on preexisting conditions—major steps toward creating a fairer, higher-quality, and lower-cost system. Yet these reforms need to be closely monitored for maximum transparency, efficiency, and effectiveness if they are to bring tangible improvements.
A panel discussion at the Center for American Progress featured speakers who represented all the different players and stakeholders, both public and private, charged with reshaping our health care system in the wake of PPACA. They were united in agreement that the current health care market is not functioning properly, and they explored what we need to do to make health care reform work for consumers.
The talk coincided with the release of a memo recently authored by CAP Senior Fellow David Balto, who moderated the event, titled “Making Health Care Competition Work.” The memo focuses on three key goals for enacting health insurance market reforms: creating a competitive health insurance exchange; requiring clear, standardized information about plans for consumers; and reining in unreasonable rate increases. Each speaker provided recommendations and keen insight into what role they and the organizations they represent will play in keeping exchanges competitive and reining in skyrocketing rates.
Health insurance exchanges are essentially marketplaces built for those consumers left out of large employer insurance plans to band together to buy the most cost effective, high-quality plan for their needs. Joel Ario, Pennsylvania’s insurance commissioner, argued that these systems would be beneficial for individuals and small businesses because, by coming together under one system, these consumers would have much more leverage and access to transparent information than they ever could on their own. The risk would be spread across larger populations, making individual buyers much less subject to the discriminatory, invasive pre-screening that many health insurance companies force potential buyers to undergo before covering them. Diane Holder, president and CEO of the UPMC health plan, also expressed interest in seeing health insurance markets move toward a community rating model.
One of the best ways to keep ballooning insurance rates in check would be to urge for more transparency, many speakers argued. “My hope is to have much better insight into what’s driving health care costs,” said Steve Larsen, the deputy director for oversight at the Department of Health and Human Services’s Office of Consumer Information and Insurance Oversight.
Ario concurred, urging more investigation into the business practices of insurance companies such as WellPoint, who claimed it was an absolute necessity to raise their rates by 39 percent in California last year. Ario said that this episode, and many others, shows that, “There are not full, effective review processes in all 50 states.” Larsen emphasized the importance of the states’ business review processes, insisting that consumers get the most possible “value for their premium dollar.”
All the speakers agreed that for consumers to win in this system, the federal government needs to facilitate competition and prevent monopolies and monolithic mergers between insurance companies. “Competition is at the bedrock of the work we do,” said Sharis Arnold Pozen, chief of staff at the Justice Department’s Antitrust Division. Pozen took a strong stance on preventing anti-competitive mergers. She cited one particularly egregious merger that was nearly brokered between Blue Cross Blue Shield and the Physician’s Health Plan, which would’ve resulted in one insurance company holding over 90 percent of Lansing, Michigan’s commercial health insurance market.
Pozen adamantly insisted that, “there shouldn’t be exemptions from antitrust laws” for health insurance companies, arguing that one of the reasons rates are so astronomically high presently is because there is a dearth of competition and market entry is incredibly difficult. She said that she is excited to see progress on health insurance exchanges and is optimistic that they will improve competition, raise quality of care, and lower prices.
The passage of health reform was a major victory for American consumers. Yet all sides of the health care system will need to work together in order to make sure that these consumers are delivered the increase in quality of care along with the decrease in costs that they have been promised. This discussion proved that there is a consensus from all sides of the equation that buidling competitive exchanges and enacting measures that will rein in rapidly rising insurance rates are the kinds of tangible reforms America needs to create a sustainable, successful health care system that addresses everyone’s needs.
Congresswoman Jan Schakowsky (IL-9)
*House schedule permitting.
Steve Larsen, Deputy Director for Oversight, Office of Consumer Information and Insurance Oversight, Department of Health and Human Services
Sharis Arnold Pozen, Chief of Staff of the Antitrust Division, Department of Justice
Joel Ario, Insurance Commissioner, Pennsylvania
Diane Holder, President and Chief Executive Officer, UPMC Health Plan
David Balto, Senior Fellow, Center for American Progress