As the news of expected and enacted premium increases spreads across the country, these state-level legislative measures are receiving more and more attention. Elected officials proudly tout them and insurance companies are already suing states in response to them. Most people, however, don’t know much about prior approval laws.

The term “prior approval law” refers to legislation that grants the officials of a state the power to review and approve health insurance premium increases before they take effect. These laws are passed at the state level and usually give the authority to the State Insurance Department. Without prior approval laws, states are restricted in their ability to regulate premium increases and, de facto or de jure, the insurance industry self-regulates.

Prior approval laws have gained attention as a result of the recent healthcare reform, which affords the federal government limited power to curtail premium increases. Although the federal reform includes provisions such as that which requires insurers to justify “unreasonable” rate increases, much of the power necessary for premium moderation has been left outside the reach of the national government.

Regulating premiums has traditionally been the responsibility of the states, and now, as we continue to see double digit premium increases during this economic crisis, it is more important than ever for states to fulfill this responsibility. It is the disappointing truth that only 19 states currently have prior approval legislation on the books. Of those 19, however, some states are making great progress by enforcing these laws. For example, Oregon officials have modified or dismissed 20 of 71 proffered premium increases in the individual and small group markets since April 2009.

Some consumer advocates and politicians support granting prior approval authority to all states. Doing so would likely end many current lawsuits between insurance companies and states. But the effectiveness of such legislation in suppressing premium increases would depend on politicians’ willingness to resist the influence of the insurance industry.

It is well known that the healthcare insurance industry aggressively lobbies federal officials and helped pen much of the recent healthcare reform. Few realize, however, that the industry exerts significant pressure at the state level as well. Much of that pressure comes from over $42 million in contributions since 2003. Jim Duffett, executive director of the Illinois-based Campaign for Better Health Care, describes the result of excessive lobbying: “State government here has basically been a wholly owned subsidiary of the insurance industry.”

Apparently, insurance companies already know what many of us are just learning; as Washington State Insurance Commissioner Mike Kreidler warns, “The battle has shifted to the states.”

Look for more on this and other healthcare legislation in future posts.

Sources:
EconomicCollapseBlog
L.A. Times
N.Y. State Government

A recent survey by the National Business Group on Health shows that large employers expect their healthcare expenses to increase significantly next year. It also shows that they plan to diffuse the cost increase by extending it to their employees.

Large employers are projecting a healthcare cost hike of 8.9 percent in 2011, a significant leap from the previously projected 7 percent increase for 2010. Healthcare reform was partly, although not entirely, credited with the increase.

The new regulation, which takes effect September 23rd, will affect costs in accordance with each company’s current healthcare practices. About 70 percent of the companies currently have “lifetime cap” or total dollar limits that they will have to eliminate. Around 25 percent will have to end annual limits on benefits. And 13 percent will now have to extend coverage to children suffering from expensive preexisting medical conditions to whom they had previously denied coverage. Many employers reported that they intend to cover these increases by requiring greater employee contribution.

Although the changes might be seen in different places, most employees will be affected by them. 63 percent of employers indicated that they planned to increase employee contribution to premiums. 46 percent of employers intend to increase employee out-of-pocket contributions.

Some companies also report that they plan to reduce costs through other means. Company-directed wellness programs have become more popular. Also on the rise are consumer-directed health plans, which allow employees more say in how they spend their healthcare dollars.

Employers and consultants are hinting –if not warning- that employees should be prepared to pay more for their health insurance in coming years. In fact, employers indicate that they intend to encourage employees to restrict healthcare spending in order to slow these rising costs.

If this is true for big businesses, are small businesses or the self-employed doing any better? As it turns out, no. No one, it seems, is able to dodge the increasing cost of health insurance. New legislation has raised costs to insurance companies who are ready and willing to pass those costs onto consumers via huge increases (sometimes 50%!) in premiums. Although some states are fighting back, the federal government and most states are helpless to perturb premium increases. Look for a future post about the changing healthcare costs that are being felt by those employed at small companies and the self-employed. Until then, look here for further reading.

The National Business Group on Health represents large employers’ health policy interests. The NBGH surveyed 72 companies, each with over 5,000 employees. These companies provide their own health insurance and hire a health insurer to administer the coverage.

Sources:
businessgrouphealth.org
theeconomiccollapseblog.com
ibnlive.in.com
kiplinger.com
msnbc.msn.com

Medical Business Associates, Inc. President & CEO was featured in the Chicago Tribune Monday, April 5th 2010 in an article by Ann Meyer titled, “Consumer Education on Medical Spending a Key Component of Many Startups.”

The article explains that many small businesses will be faced with numerous choices due to the passage of healthcare reform.

Rebecca asserts that education is important when understanding healthcare reform and how it will affect your business. “The one thing you can control is educating the individual. We spend too much on healthcare not be educating the frontline.”

At the end of the article Rebecca also offers some tips about going about acquiring healthcare. Here is a highlight of what she had to say.
1. Watch out for fraudulent billing, counterfeit medication and medical identity theft. Interesting fact: Americans spend an average of $6,400 every second in healthcare fraud, waste and abuse compared with the estimated $3,400 per second the new legislation is expected to cost.
2. Ask about your bills – overbilling by healthcare providers contributes to the high cost of treatment. Make sure you understand what you are being charged AND for what you are being charged. Example a doctor might bill with a code that says you were at the office for 60 minutes when you only actually saw the doctor for 10.
3. Make sure you are buying insurance from a legitimate insurance provider. Rebecca states, “One of the fastest-growing areas is selling fake insurance.” Research a company before you buy insurance from them. Just remember the adage – if it looks to good to be true, it probably is.

Read full article here.