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Obama Plan Faces Jeers From NAIC, NAMIC, AALTCI

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The National Association of Insurance Commissioners is ready to oppose any health bill provisions that would permit federal preemption of state insurance rate regulation, an official says.

Oklahoma Insurance Commissioner Kim Holland, the secretary-treasurer of the NAIC, Kansas City, Mo., says rate regulation is a prerogative of the states.

If White House health care reform proposals grant power to a federal rate authority to disallow increases approved by the states, Holland says, “I think we would work hard to make a strong case to not do that.”

Yesterday the White House released a proposal by President Barack Obama designed to help bridge the gap between plans passed in the House and Senate.

The president’s plan would create a new “Health Insurance Rate Authority” that would provide “needed oversight at the federal level and help states determine how rate review will be enforced and monitor insurance market behavior.”

Holland says the NAIC is in a “wait and see” mode at the moment and wants to know more about Obama’s plan.

Holland is pleased, she says, that Health and Human Services Secretary Kathleen Sebelius is charged with engaging state regulators. Sebelius was once the Kansas insurance commissioner, and she has served as president of the NAIC.

Renewed attention has been given to rate regulation in the wake of the recent announcement that Anthem Blue Cross, a unit of WellPoint Inc., Indianapolis (NYSE:WLP), plans to increase rates for some holders of individual health policies by as much as 39%.

Holland says a federal approach to address the rate increases should not be “one size fits all.” In Oklahoma, she says, the individual market covers just 4.5% of residents, and there are 19 companies competing for that business.

In California, more residents have individual coverage, and a smaller number of carriers compete for that business, Holland says.

Rate increases must be addressed along with the rising cost of health care, she says.

“All pieces must work together,” Holland says. “You can’t beat the drum of rate increases without beating the drum of rising health care costs.”

Here is a sampling of some of the other reactions to the Obama administration proposal:

National Association of Mutual Insurance Companies, Indianapolis – NAMIC President Charles Chamness notes that insurance is the last financial services industry that faces price controls.

“NAMIC has strongly opposes price controls when states have sought to impose them because we believe that over time they weaken the market and lead to higher prices for consumers,” Chamness says.

The Obama administration proposal “would effectively cede control over insurance pricing to federal government officials that have no accountability to consumers for protecting the financial stability of the insurance industry or a particular company,” Chamness says.

American Association for Long-Term Care Insurance, Westlake Village, Calif. – AALTCI Executive Director Jesse Slome says the Obama administration may be counting on the fact that the American public is so tired of the “war on health care” that any movement will be viewed positively.

As a result, the provisions in the bill that would create a worker-paid long term care benefits program “are not likely to be debated and the first step to a new public-financed entitlement program will be born,” Slome says. “The outcome will inevitably make marketing long-term care insurance far easier for the industry as a very distinct market segment will find a non-government option highly attractive.”

Henry J. Kaiser Family Foundation, Menlo Park, Calif. – The think tank has published results of a public opinion poll that Republicans and Democrats agree on the importance of many health reform goals.

Only 48% of the Republicans polled said helping low-income and middle-income consumers buy health coverage is an important goal, but more than 60% of Republicans agreed that reforming the way health insurance works, providing health insurance tax credits for small businesses, and expanding high-risk insurance pools are important concepts.

Levels of support for those goals range from 67% to 79% among independents and from 70% to 85% among Democrats, Kaiser reports.


Allison Bell added information to this report.