For working families, access to and the affordability of health care continue to be a top economic concern. Feeling the burden of higher prices on all fronts, voters are especially angry at health insurance companies and cite rising premiums, higher out of pocket costs, less coverage, and hassles dealing with claims departm
Families USA explains
that Massachusetts' 2006 health care
reform law was "built on Massachusetts'
expanded public programs and its highly regulated insurance market." In addition to providing a base for
comprehensive reform, the following examples underscore why states need to increase state oversight of insurance
rates and clamp-down on industry tactics that hurt consumers:
California regulators have been investigating
and imposing fines on many of the state's for-profit and
non-profit insurance companies.
News reports have documented rampant abuse and anti-consumer
tactics, including insurer HealthNet giving bonuses
to employees who cancel health plans after members incur costly claims and
Blue Cross of California recruiting
physicians in canceling coverage.
In Washington State, news
that astate-based non-profit insurer transferred $49
million in premium revenue over the past three years to a faltering
for-profit subsidiary in Arizona fueled
the legislature's passage of stronger oversight and rate regulation in
Post-Gazettereported that health insurer Highmark enjoyed total
revenue of $12.4 billion in 2007, growing its surplus to $3.5
billion. The article went on to report that several insurers are
planning premium hikes over the summer of 2008 because "per-share
earnings" have not met projections, down from a forecasted $6.41 per
share to between $5.76 and $6.01 in the case of the huge multi-state
insurer Wellpoint. However, the Post-Gazette reports that
Highmark's $3.5 billion surplus represents 734% of its risk-based capital
-- a measure of the money an insurer might need on hand in case of
unforeseen claims. The National
Association of Insurance Commissioners note that surpluses exceeding
250% of risk-based capital are troubling.
This section underscores leading options to ensure consumers are treated fairly in the
individual and small group markets and that more of their premium dollars actually go to health care rather than profits and share-holder
The Right, including Presidential candidate John McCain, wants every American to purchase their health insurance in the individual market, where a
of non-elderly Americans currently get their coverage. As
a new Families USA
report makes clear, this would expose Americans to even more
volatility than they currently experience in accessing health care and health
Early Tuesday morning, the Connecticut Senate joined the House and overwhelmingly adopted HB 5536, the Connecticut Healthcare Partnership.
The legislation will open up the state employee health plan to
municipalities, small businesses and non-profits. Pooling small groups
with the state employee plan, which has more than 200,000 members, will
generate significant bargaining power and enable small employers and
municipalites to negotiate better insurance rates. As we've written
previously, while more than 20 states allow similar pooling of state
and municipal workers, Connecticut would be the first to allow small
businesses to join the plan at such a large scale.
Examples of the kind of tough state insurance regulations that would be
undermined by wrong-headed federal preemption include the recent
reforms Colorado and other states are pursing in their health insurance markets.
While the financial crisis developed over a number of years in the
subprime mortgage sector, federal regulators were asleep at the wheel
as greedy lenders often took advantage of working families. Worse,
when states tried to step in with new state policies to tighten
oversight of predatory lenders, federal officials blocked those state consumer protections, making the effects of the meltdown even worse for families.
On Friday, the Washington State Legislature enacted SB 5261 which
will restore state oversight of the individual health insurance
market. The law authorizes the Insurance Commissioner to disapprove unreasonable rate increases and establishes a sliding-scale medical loss ratio for insurers.
Incremental steps to improve the health care system can lay the
foundation for comprehensive reform that provides health care for all.
Comprehensive reforms enacted in Massachusetts, Vermont, Maine and San Francisco were, in large part, the result of pragmatic incremental steps those states had already taken. For example, a Families USA report discusses the many reforms Massachusetts put in place over the years that led to its comprehensive 2006 reform. Not every state is as far along in moving comprehensive health care reform, but
each state does have numerous options for increasing access to
coverage, reducing the growth of health care costs, and improving the
quality of care.