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House business panel squashes health insurance rate review bill

House business panel squashes health insurance rate review bill

Dustin Hurst
February 28, 2012
Dustin Hurst
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February 28, 2012

On Monday, the House Business Committee squashed a bill that would allow the Idaho Department of Insurance (DOI) to review health insurance carrier rate increases and deem them too high or low.

The measure was killed on a 6-9 vote over concerns that it would cede state lawmaking authority and that the review process releases too much information to a carrier's competitors.

Bill Deal, DOI director, attempted to tamp down concerns that the process was too invasive for Idaho, arguing that the rate review practice is one that's already been in effect. “We've had an effective rate review process for many years,” Deal explained.

The measure would have implemented new provisions that Deal said would add transparency in health care, but lawmakers felt they represented an overreach by government into the private sector. The bill would have given the state agency the authority to review all health insurance rate increases and deem them too high. But it also would have allowed the department to say if increases are too low.

The rate determinations would have then been handed over to the federal government for posting for the public to see. That public release of information also includes how much health carriers are spending on health benefits, administration, advertising and overhead. Carriers would also have had to disclose how much profit they take in through policies.

Deal said the measure promotes openness. “People have been asking for this transparency for a long time,” he explained. “Transparency is what we’re all about when it comes to rates.”

But Wayne Hoffman, head lobbyist with the Idaho Freedom Foundation, said the bill cited federal code within its text, meaning that changes in national law would mean immediate changes in Idaho statute. That, Hoffman argued, cedes the Legislature’s lawmaking responsibility. “That’s unconstitutional,” Hoffman said. “That’s one of our objections.”

Shad Priest, a staffer with Regence Blue Shield of Idaho and a former DOI deputy director, told the committee that his company is entirely comfortable with the state conducting the rate reviews. “We are not disturbed at all by this change,” Priest said.

Blue Cross of Idaho and Pacific Source also voiced support for the legislation.

Rep. John Rusche, D-Lewiston, motioned to pass the bill, saying that the ability to rate review should stay at the state level. “It is very difficult for me to understand how we assert state sovereignty by turning the controls over to the federal government,” Rusche said.

Rep. Cliff Bayer, R-Boise, sided with Hoffman’s argument that embedding federal code into Idaho law isn’t the best practice. “That looks pretty open-ended to me,” Bayer said.

Rusche retorted, noting several instances of citing federal code in state law. “Are we now going to go back through Idaho law and remove all reference to federal code?” Rusche said. “That’s a very high bill for any bill writer.”

Because lawmakers rejected the measure, the federal government will take over some of the rate review process, including determining if health insurance increases are too high or too low.

Note: The Idaho Freedom Foundation publishes IdahoReporter.com.

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