As the Senate rushes to complete work on financial services legislation, odds are dimming that an amendment to the bill establishing a health insurance rate regulatory authority would even get a vote.
The authority would be established under the aegis of the Department of Health and Human Services under terms of the amendment, sponsored by Sen. Dianne Feinstein, D-Calif..
The amendment had not even been introduced by press time, and with the Senate hoping to complete work on the bill by Tuesday, May 20, industry lobbyists said it was unlikely the amendment will get a public airing.
Meanwhile, an effort by Sen. Patrick Leahy, D-Vermont, to add a provision to the bill ending the antitrust exemption for health insurers also appeared unlikely to even be considered by the full Senate.
“We would oppose both amendments if they were considered,” said Joel Kopperud, a director of government relations at the Council of Insurance Agents and Brokers.
The Department of Health and Human Services is moving quickly on measures that will have a direct impact on brokers and their clients, Kopperud said.
Agent trade groups’ primary focus is on getting input on which services would be defined as medical expenses in the new medical loss ratio regulations that will be effective in September, Kopperud said. This would also establish dollar limits on those services.
“We are engaging HHS on both issues,” Kopperud said. “Sensible MLR definitions need to be written to avoid reducing the availability of preventive care and disease management services, just to name a few that may be cut if we see definitions that are too restrictive.”
CIAB is also concerned about the fate of consumers insured under limited medical benefit plans, he said.
“Our concern here is that if these plans do not meet new annual dollar limit guidelines, over a million Americans may be left without health insurance until the exchanges are built in 2014,” Kopperud said. “We are seeking clarity on the issue and encouraging HHS to ensure the plans remain available until 2014.”
Among other developments, the Obama administration last week published final regulations implementing a provision of the new law that enables young adults under 26 to obtain coverage under their parents’ health care plans.
Under the policy, insurers will be required to allow such coverage for any American under the age of 26 who doesn’t get health insurance through their job.
The provision was scheduled to go into effect in September, noted Kathleen Sebelius, secretary of the Department of Health and Human Services, in a letter. But because health insurers are cooperating with the agency, it will go into effect immediately.
So far, every major insurance company–more than 65 in total–and several major self-insured organizations have said they will provide continuous coverage for young adults this summer, she said. She estimated that premiums are only expected to rise 7% because of early implementation.
“And it’s not a bad deal for insurance companies or employers either,” she said.
Insurers will save the administrative costs that would have added up as they dropped people in May only to sign them back up in September, she said.
“And businesses have already been notified that the tax exclusion for employer health benefits will apply to all the young adults who choose to stay on their parents’ plans,” she added.
Rep. Pete Stark, D-Calif., chairman of the Health Subcommittee of the House Ways and Means Committee, praised the administration’s prompt work on the rule.
“Many young adults are still seeking employment but are left without affordable health care because they’re no longer dependents on their parents’ plan,” Stark said. “These regulations eliminate barriers that keep many young adults from maintaining health coverage.”
In other news, the Congressional Budget Office issued a report in response to a congressional request concluding that if Congress appropriates the funds to implement discretionary spending under the healthcare reform measure, it could add $115 billion to the cost of the program over 10 years.
That would raise the total cost of the program to more than $1 trillion over 10 years, what the Obama administration described as the “unofficial limit” established when it first proposed the program.
The added spending includes $10 billion to $20 billion in administrative costs to federal agencies administering the program, as well as $34 billion for community health centers and $39 billion for Indian healthcare.
Sebelius also wrote a letter last week to governors and state insurance commissioners urging them to re-examine any WellPoint health insurance rate increases in their states. Her letter noted that Anthem Blue Cross, a WellPoint affiliate, withdrew its plan to raise premiums in California by as much as 39% when auditors found the rate hikes were based on unreasonable assumptions.
Sebelius’ letter urged governors and state regulators not only to check WellPoint’s assumptions but also to work with local and state leaders to ensure they have the authority to review and approve insurance rate increases before they take effect.
In another development, four insurance agent trade groups wrote a joint comment letter about the HHS’ efforts to roll out its first consumer Web portal on healthcare July 1.
The portal is intended to improve consumer knowledge of health insurance options by providing information in a clear and consistent format.
In the letter, the trade groups suggested that to protect consumers from unscrupulous and often fraudulent sales practices, “we recommend the inclusion of information on how to avoid scams and receive professional assistance.”
The letter also suggested that “detailed information on the high level of personal service, policy knowledge and accountability that distinguishes the licensed agent, broker and consultant should be included.”
The groups signing the letter included the CIAB; the Independent Insurance Agents and Brokers of America; the National Association of Health Underwriters; and the National Association of Insurance and Financial Advisors.