NN&I - June 2010

Health Care Beat 14 Nephrology News & Issues June 2010Subscribe to our free eNewsletter at www.nephronline.comDemocrats begin battle with insurersBy Thomas KeatingThe Obama administration spent a year and a half setting the health care reform table. Now they have to eat. And it seems they have a long list of ornery guests who claim to be allergic to everything on the menu. As health system reform enters the implementation phase, insurers and policymakers are starting to exchange blows over exactly how new regula-tions and restrictions on health plans will roll out. New bills to give the gov-ernment more clout in the process already have emerged after insurers have raised premiums. Democrats also have come down hard on the industry after some health plans said in advance of reform imple -mentation that they were raising premi -ums significantly. The lawmakers want to give the Health and Human Services secretary new power to reject such hikes if they are deemed unjustifiable. Democrats support expanding pri -vate coverage to millions of uninsured under the law, but also want to limit the profits that flow to insurers. And the fight has become more heat -ed, with announcements of increasing -ly larger plan profits and a perception that some insurance companies have been padding their bottom lines to gain a more favorable post-reform position. "We have a duty to protect the American people from the corporate greed of these for-profit, publicly trad-ed health insurance companies," said Sen. Dianne Feinstein, D-Calif., the sponsor of the bill to overrule excessive premium hikes.Democrats have publicly slammed the health insurance industry for recent premium and profit increases, large exec-utive salaries, and anecdotal reports of coverage denials. And they were upset about internal Wellpoint e-mails from fall 2009 that were obtained by a House Energy and Commerce subcommittee, which showed WellPoint planning on increasing individual market plans in California that would guarantee a larger profit. Then, months later, the company said it would hike individual market premiums by nearly 40%. But HHS Secretary Kathleen Sebelius said she is pleased health plans are working proactively with her to imple-ment a provision in the health reform law allowing dependents to stay on their parents' coverage to age 26. And several major insurance companies said they will offer this coverage before the health reform law's September deadline. The insurer WellPoint, under pres-sure from lawmakers, also stopped the practice of dropping patients in the individual market on May 1, months ahead of a federal requirement to do so. UnitedHealth Group announced April 28 that it would cease dropping patients immediately. But Sebelius predicted that imple -menting some of the law's tighter regu -lations of health plans would be "hand- to-hand combat." For example, some health plans sug-gested that a provision in the law aimed at ending coverage denials for children with pre-existing conditions would not actually mandate such a change the way it was written. HHS immediately said it would issue rules, if necessary, to enforce the require-ment, which takes effect in September. And new laws will phase in additional insurance industry regulations over the next five years. Because some states already con-duct some type of rate review, the federal review would cover only the remaining states, said Michael McRaith, director of the Illinois Deptartment of Insurance, in testimony at a Senate Health, Education, Labor, and Pensions Committee hearing on April 20. McRaith said the rate review pro-cess is not designed to be punitive or to make health plans insolvent, but rather aims at educating lawmakers and con -sumers on how health plans account for their spending.But reform supporters are concerned that insurers are taking steps now to minimize the impact that future regula -tions will have on their bottom lines.Some health plans have begun adjusting their accounting to meet the law's requirement that plans spend 80% of premiums on actual health care start -ing next year. WellPoint, for example, said it will count disease management, medical management, and a nurse hot line as health care expenses. McRaith said he is concerned that some insurers could hike premiums on costlier members in advance of a requirement to offer health insurance to everyone starting in 2014. "I do think there's a distinct possibil -ity that less-responsible companies are going to attempt to price out people who might be sick or injured," he said, or who "might become sick or injured between now and 2014." Mr. Keating is NN&I's managing editor. HCB_NNI0610_2.indd 14 5/14/10 2:55:54 PM