As President Obama campaigns across the country for health insurance reform, state officials are speaking out against one of the newest additions to the bill: the Health Insurance Rate Authority. President Obama wants to create this agency to give the federal government power to review and regulate health insurance premiums.
More specifically, the Health Insurance Rate Authority would allows the federal government to block “excessive ” rates increases.
But many state officials think that a new agency is not the answer to the problem. Also, many state officials wonder how this new authority will affect current state insurance regulation practices. According to The New York Times, 27 states already have “prior approval ” regulations and 12 other states require insurance companies to file rate increases with regulators.
Sandy Praeger, the insurance commissioner from Kansas, was one of the insurance commissioners who met with President Obama last week. She told the president, “You are not necessarily helping the consumer if you keep rates artificially low. What’s worse for the consumer: having a premium increase or having to pay the full amount of a medical expense because the company is out of business? ”
Insurance commissioners also believe that it is nearly impossible to keep premiums low before controlling health care costs. Many commissioners simply do not believe the reform bills in Congress will drive down costs and the only affect would be insurers going out of business.