New health reform benefits

Despite much GOP talk against the health care reform passed by Democrats earlier this year, important parts of the law are to be implemented by Sept. 23 that should cheer most American families. Still, the battle for reform is anything but over. For Americans to receive full benefit of the new federal health care rights, states will have to enforce provision of the new benefits and demand fair prices for them.

There is a strong possibility that insurance companies, which remain subject to state control, will raise their rates unjustifiably for the benefits, both to boost profits and to undermine support for insurance reforms. The latter may sound upside down, but many insurers apparently hope that by raising rates even more rapidly, they will convince skeptics that reform cannot work. At the least, they will boost their profits in the interim before new medical-spending rules (as a percentage of revenues) take effect.

For their own partisan reasons, Republican governors and GOP-controlled legislatures — a number of which have joined lawsuits to contest the federal health care reform law — may also slow-walk, or refuse to implement, requirements for insurance companies in their state to offer the new federal benefits, or to provide adequate regulation of the price of such benefits.

To make matters worse, just 19 states (including Tennessee) currently possess legislative power that gives them prior-approval of health insurers’ rates for small-business plans and private individual policies.

In the states that have no prior-approval authority, health insurance companies are generally in control of the legislative climate on health care reform issues through their lobbyists’ enormous donations to state lawmakers. A survey by the McClatchy Newspapers chain, for example, found that insurance companies and health maintenance organizations have handed out more than $42 million to state lawmakers since 2003. They have often helped fund candidates who oppose lawmakers who have the temerity to favor tighter restrictions on health insurers’ rates and coverage.

Even in Tennessee, its hard to discern any regulatory assertiveness in the state’s discharge of its prior-approval responsibilities. Indeed, our state’s lawmakers are legend for rolling over for the large lobbying groups — including insurance companies — that lard their campaign treasuries.

The insurance rate hikes levied by BlueCross BlueShield, for example, generally rank alongside those of its private, for-profit competitors, never mind its dominant position as the state’s largest insurer, and as a nonprofit with a reserve fund of staggering proportions.

Such widespread favoritism for, and lenient treatment of, insurance companies should not diminish Tennesseans’ and Americans’ rights to fair treatment and rates for the new benefits as they go into effect.

Among the new benefits are provisions requiring insurance companies to offer insurance for children under 19 and to allow adult children to remain on their parents’ policies up to the age of 26. Insurers may not charge co-payments for preventive services, and they may not impose a lifetime limit on benefits. They also must allow their customers to appeal denial of benefits. And they may not cancel policies or coverage except in cases of fraud or deliberate misrepresentation of an enrollee’s condition.

Many insurers, but not all, acted early to end exclusions for pre-existing conditions, one of the major insurance reforms. But most have not begun to level out their rates, or to meet the requirements for minimum expenditures from rate revenue on medical care, and transparency on their overhead spending, including the millions of dollars they pay executives out of premium revenues.

Other reforms are yet to come as the new health care reform law is phased in. Americans need them all. The task now is to make sure that insurance companies don’t overcharge for new benefits and that state legislatures enforce the rules promptly.