Report: State Insurance Regulators Often Outbid by Industry Lobbyists
State officials in charge of regulating health insurance premiums often are ineffective against insurance industry efforts to manipulate government oversight, according to recent financial data analyzed by the Tribune Washington bureau and the National Institute on Money in State Politics, the Los Angeles Times reports.
According to the data, insurers in many states funnel money to key state lawmakers, curbing legislative efforts to restrict rate hikes.
Insurers and HMOs since 2003 have provided more than $42 million in campaign contributions to state lawmakers who sit on committees that decide how much influence state regulators will have over insurance premiums, according to data. In some states, those lawmakers have blocked legislation aimed at tightening regulation of insurers.
Robert Hunter, a former insurance commissioner in Texas, said, "The pressure that the industry can bring to bear in state legislatures is unbelievable," adding that insurers "pretty much get what they want."
Help Through Reform?
Although the federal health reform law is designed to eventually rein in insurance premiums, many consumer advocates think the law cannot act soon enough to stop insurer influence on state regulators.
The overhaul gives the federal government only limited power to regulate premiums, so many consumer advocates and state officials are beginning efforts to install their own additional regulation.
The Obama administration plans to assist with the efforts by giving a series of $1 million grants next week to help states increase health insurance industry oversight.
Additional Efforts To Empower State Regulators
Some Democrats and consumer advocates are seeking to give state regulators prior-approval authority, which allows states to stop unjustified premium increases.
Currently, 19 states have such authority. For example, Oregon officials have denied or modified 20 of 71 proposed rate increases in the individual and small-group markets since April 2009.
However, health insurers have said the added regulation is unnecessary. Karen Ignagni, head of America's Health Insurance Plans, said that many insurers fear that elected officials will exploit their new regulatory powers.
She said, "They are worried about the politicization of the process. They are worried about not being able to get rates approved" (Levey, Los Angeles Times, 8/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.