House Light Hits Predatory Insurers and Complicit GOP

Well at least one of the two manager’s amendments to the final version of HR 3962 could be useful. It addresses the “Wall Street Effect”, most obviously in a section entitled Sunshine on Price Gouging by Health Insurance Issuers. The Wall Street Effect was observed when banks and credit card companies were told regulations would be tightened the beginning of 2010 – they promptly raised rates and found all sorts of fees and penalties they could assess customers prior to that. Expecting private insurers to do the same thing when faced with health reform legislation, John Dingell created preemptive strikes to ward off predatory rate spikes.

His amendment also gives states more insurance oversight power, including up to $1 billion in regulatory grants. Insurers can also be kicked out of Exchanges for bad behavior, similar to non-profit BlueShield of California losing its risk pool participation rights next year for deliberately overcharging members. While risk pools and overcharging go together like peanut butter and jelly, Blue Shield was charging 1.5 to 3 times what the other two insurers in the pool were. This was in direct opposition to state law that premiums be no more than 125% of regular market rates. Worse, it was getting reimbursed similar to the other insurers for its supposed losses.

This sort of bad behavior has a ripple effect. You see, Blue Shield also conveniently used its inflated risk pool rates as the basis for HIPAA insurance rates (an option for those whose COBRA benefits have run out.) Since California law caps HIPAA rates at the average of risk pool rates, Blue Shield was able to milk yet more profit (oops, I mean surplus) from people with no other insurance options. Speaking of having no options, perhaps the most amusing inclusion in Dingell’s amendment is the explicit exclusion of illegal immigrants from participating in the temporary national risk pool. Like they could afford it anyway?

Of course, we have John Boehner to look to on the affordability front. His amendment is called the Common Sense Health Care Reform and Affordability Act. The only problem is it contains no common sense answers or affordability solutions within it. The media and healthcare economists have gone to town on Boehner’s removal of the recission ban, continued tolerance of policy denials based on pre-existing conditions, and risk pool “solution”. I’ve already hammered on his reliance on tort reform, insurance pools and inter-state policy purchases. For those that think Pelosi’s bill is a gift to the insurance industry, take a look at this offering.

Both Dingell and Boehner offer some very reactive solutions to our healthcare crisis. Those are the only two manager’s amendments published and it looks like that's it. Despite protests and arrests, proactive solutions like Kucinich’s state single-payer, which would remove loopholes preventing states from trying the Medicare for All strategy, are still in purgatory. So we’re still focused on keeping the predators at bay.

UPDATE: Okay, this is funny. The CBO just scored the Republican plan, and it isn't pretty. Over 10 years, it increases the number of insured by ... zero (meaning it only makes up for the 3 million more expected to lose their coverage.) Meanwhile, it saves $68 billion compared to HR 3962's $104 billion. So HR 3962 covers 12 times as many people and saves 53% more than Boehner's masterpiece. That's got to hurt! As the bumper sticker says, "There are 3 types of people: those who can do math, and those who can't."

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