Labor & Employment Law

Failing to Kill Health Care Reform, Insurers Now Fight to Weaken It

By Mike Hall

After spending tens of millions trying to kill the new health care reform law, the nation?s big health insurance companies now, says Sen. Jay Rockefeller (D-W.Va.), are:

sparing no expense to weaken this new law and the protection it promises to America?s consumers.

According to a new report by the coalition Health Care for America Now (HCAN), big insurers are trying to gut proposed new rules that require they spend a certain amount of premium dollars on actual medical care, not wasteful administration, marketing or executive pay and bonuses.

The medical care cost benchmark under the Affordable Health Care for America Act is known as the medical-loss ratio (MLR). It is set at a minimum of 80 percent of premiums for individual and small employer plans and 85 percent of premiums for large employer plans. Insurers that fail to meet those MLRs must rebate the difference to enrollees.

The new MLR rules are being established by the National Association of Insurance Commissioners (NAIC), which is made up of insurance regulators from the states. According to the HCAN report, the America’s Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association and their member insurers:

want to redefine MLRs by pressuring the NAIC to give insurers vast discretion over what expenses they may classify as clinical and administrative costs. Already, Wellpoint Inc., the nation’s largest private health insurer by enrollment, has reclassified $500 million in administrative costs as medical expenses.

Rockefeller says the insurance industry is ?furiously lobbying? the NAIC to write the new rules in a way that will:

allow them to do business as they did before the passage of health reform. The resources health insurance companies are throwing into the effort to weaken the medical loss ratio appear almost endless.

On HCAN?s The Now! Blog, HCAN Executive Director Ethan Rome writes:

The definition of “medical care” is at the core of this fight….So they want to change the definition of “medical care” to include things that aren’t medical care and that have never been considered as such. And the insurance companies are shameless in just how far they will go. They really are trying to have “underwriting,” the process by which sick people are weeded out of eligibility for coverage, defined as a medical expense! Along with claims processing, call centers and other expenses that aren’t about the actual delivery of care.

According to the report, if the new law had been on the books in 2009, the six largest for-profit health insurance companies would have been required to refund $1.9 billion for that year alone. That would have represented only a fraction of their massive profits. The top five for-profit health insurers alone recorded $12.2 billion in profits in 2009.

Sen. Al Franken (D-Minn.), who helped write the medical cost requirements into the bill, says health care reform:

will bring coverage to 32 million uninsured Americans, which will bring lots of new business to private insurers. We need strong regulations for medical-loss ratios so Americans can be confident that they’re getting value for their premium dollars.

Full post as published by AFL-CIO NOW BLOG on July 27, 2010 (boomark / email).