Some Illinois lawmakers are pushing for a delay in a pilot program that would place some elderly and disabled Medicaid patients into HMOs. The Illinois Department of Healthcare and Family Services has issued a request for proposals by managed-care plans to provide medical care services to 40,000 seniors and adults with disabilities in suburban Cook, DuPage, Kane, Kankakee, and Will counties. But lawmakers say the state is trying to launch a program before it has been adequately vetted by lawmakers, medical care providers, and other groups, the Chicago Tribune reports.
The U.S. House of Representatives today stripped health insurance companies of antitrust exemptions by a 406-19 vote.
The bill received the support of all Democrats who voted and from 153 Republicans. Nineteen Republicans voted against the bill.
The Health Insurance Industry Fair Competition Act (HR 4626), sponsored by Democratic Representatives Tom Perriello of Virginia and Betsy Markey of Colorado, removes the health insurance industry's antitrust protections under the McCarran-Ferguson Act of 1945.
Markey and Perriello said in a joint media release that passage of the bill means that health insurers would no longer be protected from liability for price fixing, dividing up market territories, or bid rigging.
In the last 14 years, the cosponsors said, there have been 400 mergers among healthcare insurers so that 95% of health insurance markets are "highly concentrated," which means consumers have little or no choice between insurers. This non-competitive market has led to health insurance premiums having more than doubled in the past decade.
Related legislation in the Senate, S 1681, sponsored by Judiciary Committee Chairman Patrick Leahy, D-VT, remains in his committee, where it is expected to face more-concerted resistance from Republicans.
Health insurers criticized the legislation passed by the House Wednesday as misdirected and unnecessary.
"In attempting to solve a problem that doesn't exist, this legislation is the triumph of soundbites over substance," said Karen Ignani, president and CEO of America's Health Insurance Plans in a prepared statement. She added that the National Association of Insurance Commissioners determined anti-competitive practices already are not permitted under the McCarran-Ferguson Act and are not tolerated under state law.
Ignani said the House action had nothing to do with healthcare reform. "Real reform means containing costs to ensure that healthcare is affordable for working families and small businesses," she said. "It's time to clear the political hurdles that stand in the way of real cost containment."
Ignani added that the Congressional Budget Office has said that "passage of this legislation will do nothing to reduce healthcare costs."
"We don't think it's necessary, it's not going to do anything," Brett Lieberman, spokesman for the Blue Cross Blue Shield Association, referring to the House vote. "Health insurers are very regulated, with many state and federal regulations. This isn't going to do anything about the underlying factors that are driving costs—medical expenses and people losing jobs."
HR 4626 has the "strong support" of President Obama, White House Press Secretary Robert Gibbs said this week. "At its core, health reform is all about ensuring that American families and businesses have more choices, benefit from more competition, and have greater control over their own healthcare. Repealing this exemption is an important part of that effort," Gibbs said. "Today, there are no rules outlawing bid rigging, price fixing, and other insurance company practices that will drive up healthcare costs, and often drive up their own profits as well."
On Wednesday, President Obama applauded the House for passing the Health Insurance Industry Fair Competition Act "on a strong bipartisan vote."
"This bill will help ensure that insurers abide by common-sense rules that prevent bid-rigging, price-fixing, and other practices that drive up healthcare costs for the American people."
"Repealing the antitrust exemption for health insurers is an improant step toward achieving reform that gives families and business owners greater control over their healthcare," Obama said. "I look forward to meeting with congressional leaders [today] to continue this critical discussion."
However, a Congressional Budget Office review last fall of a similar bill found that state insurance regulators and state laws "already prohibit issuers of health insurance and medical malpractice insurance from engaging in practices, such as price fixing, bid rigging, and market allocations." HR 4626 does not strip medical malpractice insurers of their antitrust exemption.
In addition, the Congressional Research Service said in a report last month that removing antitrust exemptions from health insurers might actually exacerbate the very problem it hopes to resolve because it prohibits smaller health insurers from setting their rates based on shared data collected by larger competitors.
"Should additional data be unavailable to small insurers in some way, further consolidation in the insurance industry as small insurers merge in order to gain the competitive advantage of additional information is a likely, albeit, ironic, possibility," the CRS report said.
The House's vote came on the same day that the American Medical Association issued a report that found competition in the health insurance industry is disappearing.
The White House has also called for the creation of a federal Health Insurance Rate Authority, a seven-member oversight board comprised of economists, physicians, and consumer and insurance industry representatives who will have the power to review and block premiums rate hikes that they deem are excessive.
Creation of a nationwide authority to put a lid on insurance rate hikes is one of the newest elements of President Obama's healthcare reform plan, but the proposal already faces resistance from state insurance officials and the private insurance industry.
Under the plan announced by the White House on Monday, a new Health Insurance Rate Authority would provide federal assistance and oversight for states to conduct reviews of "unreasonable rate increases and unfair practices" of insurance companies. The administration reacted to proposed rate hikes for individual plans around the country, especially a plan by Anthem Blue Cross of California. Anthem's plan, which includes a 39% rate hike, is the subject of a congressional hearing scheduled Wednesday.
However, the White House plan to create the Health Insurance Rate Authority is facing concern among insurance and state government officials, although they acknowledge the specifics of the proposal are still largely undefined.
A top healthcare official of National Association of Insurance Commissioners says the group is ready to oppose provisions of the plan that would overshadow state insurance regulation.
"I think there is some justification setting some standards and having states adopt those standards," says Sandy Praeger, Kansas's insurance commissioner, referring to the Health Insurance Rate Authority proposal. "But we would fight giving up rate approval authority. We don't want to give up authority at the state level. We would like to work with state regulators to come up with some standards, without taking the authority from us."
Robert Zirkelbach, spokesman for America's Health Insurance Plans, opposes the plan, saying it is tantamount to "creation of new federal regulation guidelines on top of what the states have—it just adds to regulatory complexity. "
The White House has not clearly defined the nature of the Health Insurance Rate Authority, according to experts in the field. In a statement, the Obama administration said it would create the new authority to provide "needed oversight at the federal level and help states determine how rate review will be enforced [and] monitor insurance market behavior."
Noting that health insurers submit their proposed premium increases to the state, or the HHS Secretary for review, "The president's proposal strengthens this policy by ensuring that if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates or take other actions to make premiums affordable," according to the White House.
The Obama plan, which is similar to legislation that Sen. Dianne Feinstein, D-CA, has proposed, is an effort to establish uniformity in the system and establish oversight that some states lack, according to Praeger.
"Kathleen [Sebelius] used to have my job; she understands the need for state oversight in terms of consumer protection," she says, referring to the current HHS Secretary and former Kansas commissioner of insurance. "The devil is in the details . . . We are just going to continue raising our concerns about the ability of states to regulate. We don't want an authority—we would definitely object." An advisory commission would be suitable, she adds.
While the Obama plan offers few specifics, the legislation proposed by Feinstein offers some details that Praeger indicated might reflect what the White House is thinking. Under the Feinstein plan, the HHS secretary would have the power to "review premium cost increases in states where the insurance commissioner does not have the authority or capability to conduct such reviews."
At least a dozen states have limited insurance commissioner authority to conduct reviews, Praeger says. Feinstein said in a statement "at least 25 states give their insurance commissioners some type of authority to review or regulate premium hikes and other charges, including deductibles and copayments. California is not on of those states. That needs to change."
In addition, the Feinstein bill would require companies to justify unreasonable premium increases, using a process to be established by the HHS secretary.
One of the difficulties facing a prospective authority is that the states "have different standards and different approaches," says Susan Berson, a healthcare attorney for Mintz Levin in Washington D.C. "It's complicated. I don't know if increasing oversight will do anything more than create more red tape and bureaucracy."
Executives from California-based health insurer Anthem Blue Cross are facing criticism for scheduled rate hikes of up to 39%, but insist that their premiums were fair and legal. Appearing before the California Assembly's health committee, the officials said that they believed rate increases for individual health insurance policies, delayed until May 1 while being reviewed by the Department of Insurance, would survive scrutiny by regulators, the Los Angeles Times reports.
Dallas-based hospital chain Tenet Healthcare Corp. swung to a fourth-quarter profit as revenue rose. The company forecast higher revenue next year but said increased expenses will slow profit growth. Tenet posted a net quarterly profit of $21 million, or 4 cents a share, compared with a net loss of $33 million, or 7 cents a share, a year earlier. That beat profit expectations of 1 cent a share, based on 20 analysts polled by Thomson Reuters.
Democratic lawmakers are increasingly confident that they can resurrect their health reform legislation after weeks of uncertainty about whether they could overcome the unified opposition of Republicans. Democratic leaders have settled on a strategy to avoid a Republican filibuster by convincing wary House Democrats to pass unchanged the healthcare bill approved by the Senate last year and send it directly to President Obama for his signature, the Los Angeles Times reports.