Wednesday, December 8, 2010

A little bit of Chicago-style politics in Connecticut?

After originally approving insurance premium rate hikes for as high as 47% for Anthem Blue Cross and Blue Shield plans, the state of Connecticut Insurance Department has has reversed course and rejected premium hikes of 20% for individual health plans.

In the 22-page decision, Franklin recommends that Acting Insurance Commissioner Barbara C. Spear deny the increases. The department did an actuarial analysis with revised assumptions and concluded that a zero-percent increase would be both "reasonable and actuarially sound." Spear signed the decision Friday, officially denying the rate request.

(italics, ours)

It should be noted that previous Insurance Commissioner, Thomas Sullivan, who had approved the rate hikes originally back in September has since resigned to take another job ahead of outgoing governor Jodi Rell, and who told Attorney General, Richard Blumenthal, who had complained about the rate hikes to take his complaints to Congress.

So, we go from rate hikes ranging from 20-47% that were approved without change by the state's Insurance Department to no rate hikes at all? Those must've been some very significant "revised assumptions".

Let's go to the White House blog and see what Nancy-Ann DeParle, the director of the White House Office of Health Reform had to say about all this and see if it sheds any light into what is going on in Connecticut.

On Friday, consumers in Connecticut got some good news when the state insurance commissioner rejected Anthem Blue Cross and Blue Shield’s plan to raise insurance premiums by 20 percent. The premium increase would have raised rates for 48,000 consumers. After a thorough look at the facts, Connecticut officials determined that the rate hike was “excessive” and that no rate increases would be necessary. You can read media coverage of the Connecticut decision here.

The work in Connecticut shows the power of premium review – a process used by states to evaluate and approve proposed health insurance premium increases. Today, some states have stronger premium review processes than others, so the Affordable Care Act included $250 million in grants to states that will help them strengthen their premium review efforts and protect consumers. We’ve already seen premium review hold down rate hikes in California, Massachusetts, Maine and now, Connecticut and we expect to hear more good news from other states in the months ahead.

You know, if we didn't know any better, we'd have sworn that DeParle was talking about some sort of quid pro quo arrangement. Was that $250 million to ensure state insurance commissions made sure there were no rate increases? This is ObamaCare we are talking about, after all.

Supporting state efforts to crack down on premium hikes is just one of the steps the Affordable Care Act takes to help control health care costs for families nationwide. In addition to setting up exchanges -- new competitive health insurance marketplaces where Americans can shop for affordable coverage options – the law:

•Requires insurance companies to publicly justify any unreasonable premium increases beginning in 2011.
•Requires insurance companies to spend at least 80 percent of premium dollars on health care instead of overhead, salaries or administrative expenses, in 2011. If they don’t, they will be required to provide a rebate to consumers.

And this is precisely why companies like Jack in the Box and McDonald's applied for and were granted waivers for the health plans of their low-wage employees. Overhead costs as a percentage of what is spent on these high-turnover employees are naturally going to be higher and what this points to is the folly of the one-size-fits-all approach taken by ObamaCare.

•Insurance companies who unreasonably raise rates between now and 2014 may be denied the opportunity to participate in the new exchanges.

Uhh, according to what just happened in Connecticut, the rates weren't raised precisely because the Insurance Department deemed them to be unreasonable so we have no idea what that statement meant. And the whole concept of "unreasonable" now seems to be a moving target, at least, in Connecticut.

Oh, that's right. This is just thinly-veiled threat language directed at the insurance companies that they better not make too many waves by even requesting "unreasonable" rate hikes. We'll let that thug, Kathleen Sebelius, Secretary of Health and Human Services explain it in plain language that leaves nothing to the imagination:

"There will be zero tolerance for this type of misinformation and unjustified rate increases," Health and Human Services Secretary Kathleen Sebelius said in a letter to the insurance lobby.

"Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections," Sebelius said. She warned that bad actors may be excluded from new health insurance markets that will open in 2014 under the law. They'd lose out on a big pool of customers, as many as 30 million people nationwide.

So, to be clear: Not even will health care providers be forbidden from seeking "unreasonable" rate hikes, they will not even be permitted to voice their opinions on the matter.

Some greasin', some threatin'... it all kind of makes sense.


steve said...

Do you work in the insurance industry. Rate hikes of 20%-47% sound like what you see when they are trying to get people to drop their individual insurance. The highest we have seen in the last 10 years was a 26% increase in one year for our group.


Dean said...

Steve, I do not. However, if I were to blog only about my profession, I would risk putting whatever scant readership I do have into a catatonic state as I held forth daily on physical progressing, stern tube seals, CBSP antennas, Mil-spec non-skid, pre-delivery checklists and Work Task Authorizations. And I think it's safe to say that the interwebs, in general, would be far less interesting if everyone else did this as well.

So, the fact that the Insurance Department went from approving the rate hikes without change to denying them altogether doesn't raise an eyebrow for you?

You are a far more trusting soul than I am.

Off topic: thanks again for the heads-up about the Marine Corps Scholarship Fund. I made a donation in Will and Linsey's name last week.

steve said...

LOL. I dont trust the government OR insurance companies.

OT- Yup, good group. Started off donating to USO since they were good to me long ago, but have added others along the way. Thanks for donating.