Some well-intentioned but really misguided legislators in California are proposing to force insurance companies to get regulatory approval before raising rates, copays, or deductibles.
Now that is one really bad idea, an idea that likely never would have come up if not for some really bad decisions by insurers.
Here’s how a key passage reads –
“No rate shall be approved or remain in effect that is excessive, inadequate, unfairly discriminatory, or otherwise in violation of this article.” Yet there is precious little in the Act that defines these terms, thereby leaving it up to the regulators’ discretion. Which may change from time to time…
It is incredibly onerous. Plans have extremely complex systems of deductibles and copays, and premiums vary greatly based on the nuances of plan design. How they are going to assess drug tier copays, ER deductibles, internal copays for psych outpatient visits and the like is beyond my ability to comprehend.
Insurers will find ways around these limits by changing benefit design mid-year. If that is limited, they can narrow the list of preferred providers to those that are cheapest.
It will force insurers to set rates higher than they otherwise would because they may not get their next rate increase, and because they can only increase rates once a year, they will need to fudge the numbers on the high side in case their forecasts are too low.
As bad as this is, it is easy to see how it has come about. Wellpoint and their competitors in California have done a great job of antagonizing the entire state with their heavy-handed and downright dumb attempts to deny care and coverage.
And look what it got them.
Thanks much to California Healthline for the info.
Joe, you can’t have it both ways!! If you SOCIALIZE medicine, the state is going to dictate the rates, the levels of coverage and who gets covered, all in an effort to provide uniform UNIVERSAL COVERAGE. This is the “slippery slope” that we go down when we let the government dictate and control healthcare, instead of letting market forces come up with the solution.
I can’t believe you have an issue with this?
Dorrence – First, I suggest you stop with the pejorative use of words like “socialize”. It distorts the conversation by causing individuals to leap to inappropriate, and in this case flat out wrong, conclusions.
Second, nowhere have I stated that under univesal coverage a governmental entity sets rates. You are inferring or reading into what I have said previously; methinks your anti-socialized medicine mindset is causing you to jump to conclusions.
Third, there is absolutely no inconsistency in my position. We need to require coverage, and let the market determine which payers capture market share.
Finally, please go back and read my previous posts.
Oh, and in several other countries, the insurers set the rates based on their costs. See Germany.
Joe
Joe: Thank you for the demonization of the use of “socialized medicine”. For years I have cringed each and every time some pundit/speaker throws this term out and as you correctly state, creates an immediate emotional response rather than a reasoned discussion. The term should be banished from the current healthcare debate. It is inaccurate, inadequate and too emotionally charged to be relevent.
Thanks again