Insurance Commissioners: Health Reform Will Not Limit State Oversight

John Commins, for HealthLeaders Media , March 23, 2010

As far as regulating medical loss ratio within the compact, the commissioners said that would almost assuredly remain within the purview of each individual state. "Otherwise, you could game that system easily," Praeger said.

The commissioners also expressed concerns that the three-to-one rating bands in the bill for the "young invincibles" might be too restrictive, and drive those young healthy adults out of coverage. The commissioners say the penalties for ignoring the insurance mandate of up to 2.5% of annual income would still be cheaper than the cost of health insurance coverage.

"That has been one of our principal concerns, that there is an inadequate penalty to enforce the mandate in a meaningful way," Holland said, adding without a proper penalty "motivated buyers," such as those with an illness, would buy coverage, while the "young invincibles" would rather pay a small penalty.

With the passage of the bill in Congress, Republican opponents have vowed to take their fight to the state level. Attorneys general in three states have already vowed to challenge the constitutionality of the individual insurance mandate. The commissioners said they are aware of the turmoil surrounding the bill, but that they will plan for implementation.

"The timeframes in some cases are narrow enough that we can't afford to let any time lapse. We will move ahead assuming this will become the law and that it won't meet any constitutional challenges that will be effective," Praeger said. "We have more to lose by not being ready than by waiting and seeing. We will move ahead."

John Commins is a senior editor with HealthLeaders Media.

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