KASSEBAUM-KENNEDY: GAO Says HCFA Can’t Handle Enforcement
The Health Care Financing Administration "has been unable to handle many of the new responsibilities heaped upon it in 1996 under the Health Insurance Portability and Accountability Act," according to a newly released General Accounting Office report. CongressDaily/A.M. reported that Sen. James Jeffords (R-VT), chair of the Labor and Human Resources Committee, released the GAO report Monday. Jeffords said a problem with the 1996 portability legislation, commonly known as the Kassebaum-Kennedy law, is that it requires HCFA to enforce the standards if the states fail to do so. "[I]f the states don't do it, or (don't) want to do it, then HCFA has to do it. And they are not qualified to do that. That could create chaos," Jeffords said (Norton, 7/28).
The GAO found that as of the end of June, three states -- California, Rhode Island and Missouri -- have "voluntarily notified" HCFA that they have "failed to enact" some Kassebaum-Kennedy provisions. Two other states -- Massachusetts and Michigan -- "are widely known to have not enacted conforming legislation" but have not notified HCFA. This means that for these five states, HCFA must perform several duties that the states normally should perform, such as fielding consumer complaints, answering insurers' questions about the law and monitoring and enforcing compliance.
Who Dropped The Ball?
Because HCFA thought the states would adopt Kassebaum-Kennedy standards on their own, the agency "reassigned only a small number of staff members to address enforcement issues," the GAO reports states. Thus, HCFA officials have "taken a minimalist approach to" enforcing the law. HCFA said the limited staff assigned to the portability law means that the bulk of its enforcement activities will be focused on answering consumer complaints, and the agency says additional staff will be needed to enforce other areas of the law. Further, the GAO report says HCFA involvement in some states, such as California, would create a "patchwork quilt of federal and state enforcement" that could "further fragment and complicate the regulation of private health insurance." The GAO concludes that HCFA's regulatory role is likely to expand as it forces states to comply with Kassebaum-Kennedy. Jeffords states: "It is clear that HCFA's new regulatory responsibilities will increase the burden faced by health carriers and regulators, and will add to the confusion faced by consumers, who try to navigate through the intricate system of overlapping and duplicative regulatory jurisdiction" (Jeffords release, 7/27). CongressDaily/A.M. reports that Jeffords is expected to hold hearings on the matter in the near future (7/28).
Job Switchers Beware
Syndicated columnist Jane Bryant Quinn says Kassebaum-Kennedy "isn't delivering as promised" for everyone. She outlines some of the problems consumers have been facing as states gradually implement the law -- such as insurers delaying applications until they no longer qualify, insurers paying agents extremely low commissions for Kassebaum-Kennedy policies and insurers charging high premiums (sometimes five times the normal rate) for Kassebaum-Kennedy policies that no one can afford them (Lexington Herald-Leader, 7/28).