Consumers Win Important Battle Over How Health Care Reform Will Be Implemented

Thanks, NAIC!Earlier this week I asked you to send thank-you notes to one of America's biggest health insurers for helping to shed light on an important policy matter. If you did, thank you, but please don't put your good stationery away just yet. You need to write yet another note of gratitude -- this time to our state insurance commissioners. This morning they did the right thing for consumers when they refused to cave in to intense pressure from the profit-obsessed insurance industry to gut an important provision of the health care reform law.

I wrote on Tuesday that we all should send thank-you notes to the executives at UnitedHealth Group, the country's biggest health insurer. United announced that day that its third-quarter profits were up a whopping 23%, largely as a result of finding ways to spend far less of their customers' premiums on medical care than just a year earlier. The company was happy to report to its shareholders that its medical-loss ratio (MLR) -- which is a measure of how much of the premiums it collected that it actually paid out in claims -- dropped a stunning 3.7%, to 80.9%. It is in investors' best interests for the MLR to go down. The less an insurer spends on care, the more is available for profits. It is not at all a good thing for policyholders, however, which is why Congress included a provision in the health care reform law that, beginning next year, will require insurers to spend at least 85 percent of premiums it collects from its large group customers on medical care. For insurers' individual and small group customers, it is 80%. Insurers that do not meet those minimums will have to issue rebates to their customers.

Congress gave the National Association of Insurance Commissioners (NAIC), a group comprising the nation's top state insurance regulators, the task of recommending to the Department of Health and Human Services (HHS) how the MLR provision should be enforced. The commissioners have been at work drafting the MLR regulations for the past six months. The insurance industry, which tried without success to keep the MLR provision out of the law, thought it could have its way with the commissioners. It has been pressuring them relentlessly to load the regulations up with loopholes so big they would have no trouble meeting the new requirements. Unfortunately for insurers, UnitedHealth's announcement of its big increase in profits, made possible by the big decrease in its MLR, came just two days before the NAIC was scheduled to vote on the recommendations it will send to HHS.

Insurance Commissioners Reject Insurance Industry-Backed Amendments

Timing is everything, especially in politics and policy-making. This morning at the NAIC's fall meeting in Orlando, the commissioners voted to reject all of the insurance industry-backed amendments to the regulations that had been developed in a thoughtful and transparent process at the NAIC committee level. Had United's profit announcement not demonstrated so clearly why the MLR provision was included in the reform law in the first place, the commissioners likely would have been more inclined to weaken the regulations to the point of making the MLR provisions of the law meaningless to consumers.

But that's not the only reason. Several consumer groups were engaged and made a big difference in the outcome by making their points of view known to the commissioners. They did not have anything close to the financial resources the insurance industry had to lobby the NAIC, but they were armed with facts and figures that the commissioners could not ignore.

Good News for Consumers

Today I can say that I am proud to have been one of 28 people selected by the NAIC to represent the interests of consumers this year. The NAIC's vote this morning is clear evidence that the commissioners listened to us. We didn't win all the arguments over the past six months -- the work the NAIC approved this morning represents a compromise between the interests of consumers and the insurance industry -- but we won many of the important ones. The recommendations that will go to HHS will make it easier for insurers to meet the MLR minimums, there's no doubt about that, but they will also help to ensure that most of what we pay in premiums for health coverage will actually go to pay for medical care, not insurance company shareholders and executives. That is a big victory for consumers.

P.S.: While all of the consumer representatives to the NAIC made important contributions to the debate and the final outcome on the NAIC's MLR work, I would like to thank one consumer rep in particular. Tim Jost, professor of law at William & Lee University, was our big gun. No one knows health care law, and the Affordable Care Act of 2010 in particular, better than Tim. He devoted countless hours to making sure consumer interests were heard and heeded. Commissioners frequently asked for Tim's opinions on the often obscure matters being discussed during seemingly endless conference calls over many months. So before you send a thank-you note to your state insurance commissioner, send one to Tim. He is a true champion of the consumer.

P.P.S.: As expected, some critics of the MLR provision--including, of course, America's Health Insurance Plans, one of the industry's big lobbying and fear-mongering groups--were quick to condemn the NAIC's actions, claiming it would reduce consumer choice and health plans' incentive to improve quality. AHIP president Karen Ignagni warned of dire consequences. "Defining health care quality initiatives in a way that is too narrow or static will turn back the clock on progress and create new barriers to investment in the many activities that health plans have implemented to improve health care quality," Ignagni wrote in a statement after hearing of the NAIC's vote this morning. "More specifically, we want to highlight our recommendations for modifying the definition of health care quality initiatives to include fraud prevention and detection programs and the initial startup costs associated with implementing the new ICD-10 coding system."

Nonsense. These regulations will not take away the incentive for health plans to root out fraud and abuse. They already have installed amazingly sophisticated IT systems to detect fraud. I know because I used to write press releases about them. Health plans will not unplug those systems just because they can't categorize their fraud-busting efforts as activities that improve the quality of care. As for expenses related to implementing the new ICD-10 coding system, insurers are required by law to implement them, and not a minute too soon. Every other health care system in the developed world has already put the ICD-10 system in place.

The new MLR regulations might indeed cause a few inefficient health plans to either improve the way they do business or close up shop, but why is that a bad thing? Because it will "reduce choice?" One of the main objectives of reform is to reduce waste and ensure Americans get the value they deserve when they send in their premium payments every month. If the health plans that take our money but give us lousy coverage in return are forced out of the marketplace, I say good riddance, even if their departure means that the bigger and more efficient plans that offer better value pick up the customers they leave behind.


I would love to say thank you to anybody who has tried to right the terrible wrong of Obama's healthcare giveaway to Big Insurance. But I just don't trust any of this.

Wendell, thanks for taking the role that you have with Health Care Reform and also for communicating and explaining what has been and is going on now. Sincerely, Michael Laws, Jr.

Thank you, Mr Potter, for again standing up for consumers, and also for keeping us informed about what is happening with the heathcare reform law.

While I'm a HUGE supporter of the healthcare reform laws as passed and the resulting consumer protections that come from them, there IS a problem with ICD-10 that needs more HHS attention. ICD-10 is a world health standard when it comes to diagnostic coding and as a result, there are many good translations between ICD-9 and ICD-10 that allows us to have the advantage of now tracking the extra information that the ICD-10 standard supports without losing the meaning and history of all the old data gathered in ICD-9. Unfortunately, the world health standard does not apply to ICD-10 Procedures. Each country in the world created their own standard and the US invention of ICD-10-PCS is a nice framework but the HHS has yet to provide general equivalence mappings from ICD-10-PCS back to ICD-9. HHS has been doing a great job in getting the word out about ICD-10 diagnostic coding including classes/training for clinical coders and IT professionals. Using wikipedia as a measure of how well the information is being communicated you can see great progress: BUT if you look at the ICD-10-PCS that has not been the case. HHS has delivered very few classes, there is much confusion, and as I mentioned come 10/1/2013 when it is to be implemented it really looks like we'll lose any ability to analyze/track what was previously done to a patient because General Equivalancy Mappings are still missing. Take a look at it's wikipedia page and you can see that it's far from a complete picture of an intended standard. It's not HHS's job to update wikipedia but the fact that no one can fill in the blanks of what the standard is supposed to be should be a red-flag. ICD-10-PCS is the system that truly tracks medical costs. Every procedure, study, x-ray, operation, and doctor's visit is going to get an ICD-10-PCS code. Anyone who truly wants to understand how costs are changing before/after medical reform is enacted needs to have a method of looking at data spanning both ICD-9 and ICD-10. I'm horrified at this point at the lack of progress on the ICD-10-PCS implementation to date by HHS. I'm often skeptical of the profit motives of insurance companies but they do play a very important role in our reform plans by monitoring these costs and how they change over time. Since HHS is mandating the change to ICD-10 but not giving them what is needed to fill this important role they have every right to be warning us and in this particular instance we should be agreeing with them.

Who cares about any of this. Everyone should be entitled to Medicare. This way big business would go out of business.

I guess I must be a consumer elitist. I actually represent consumers, not insurance companies, not the NAIC, not the healthcare lobby's, I represent consumers. For the past 20 years, I have watched healthcare companies find ways to increase premiums hooking the consuming public on copay's, seperating common sense and consumerism from the public. Healthcare reform from both the Republicans and Democrats both served the insurance company interests, not the consumer. Half Truths and a corporate viewpoint dominated the debate, and the insurance carriers won on both sides. The only loss for insurers would have been no new regulation. So here we are 6 months later, and some of the provisions are going into effect. The most important part was the provision guaranteeing access to insurance for any child under age 19. Did that work? A resounding NO! I live and work in Illinois, not a low cost unregulated State. We had age 26 for kids already as did several States. So now, Kids are Guaratee Issue. Here are the results. 1) No more policy's are sold to kids only. If the parent isn't insurable, the kid doesn't get coverage. 2) Costs are skyrocking. Up until Oct 1, if you had Blue Cross and 5 kids, you paid for the first 2 kids, and then each kid after 2 was no additional cost. No more. Your policy for you, the wife and 5 kids is going up 45% because Blue Cross has to charge per kid. 3) If you had a child with chronic Illness, and you were coming off COBRA, the child would have been declined and then you would have been eligible for coverage under the State mandated, insurance company subsidized, CHIP program. Where you would have paid no more than $200 per month for that child, now you can get coverage where you want for as much as $1000 per month for that child. You are no longer eligible for CHIP without a pre-ex clause. 4) Mandated Routine Care - If you mandate $1000 of routine care at no cost to the insured, the insurance company gets to charge you more for it. Coming soon. Mandatory Maternity coverage. That'll help add more money to the coffers of insurers. Meanwhile, HHS is making exceptions right and left to the laws exempting "important" organizations. (Guessing that they are big contributors, AKA: not consumers). Millions more of the influential will get those exceptions as they come up. It's no surprise that United Healthcare profits were up. I promsie you that UHC's 80.%+ loss ratios are more than compliant with the new numbers. The righteous healthcare reformers fell for the trap and the consumer lost again. The new rules mandate higher rates and bigger gross margins. There is only one form of healthcare reform that wont favor insurers, and that is a single payer system. The only way to fund it would be a consumption tax, and you can bet that will never happen. Seniors would NEVER allow it. Don't be a sucker. The government cannot mandate that dollar bills be sold for quarters. If you want to fix it. Break it. I posted here a year ago and took abuse as an "insider". Yeah.. Uh huh. I represent consumers.

I have a small shop and business can be good or slow based on many factors such as the weather or economy but this healthcare issue is consistant. I look forward to the day when it is easy to make important choices in regard to employees and healthcare. Frankie Spain ______________ <a href="">Water Damage Tucson</a> <a href="">water restoration tucson</a>