Eyeing Insurers’ Expenses

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Bloggers examine one of the key issues at the meeting of the National Association of Insurance Commissioners–the question of what expenses insurers will be able to count as medical care, which is important because the new health law sets requirements for such spending. Others discuss repealing the health overhaul and what the FDA’s consideration of an expensive breast cancer drug.

The New Republic’s Jonathan Cohn previews the battle between Health and Human Services Secretary Kathleen Sebelius and health insurers over regulations for the new health law: “The architects of the Affordable Care Act … packed the law with regulations designed to force insurers change their behavior. … The good news is that Secretary Kathleen Sebelius has recruited some of the country’s most respected and seasoned regulators to carry out this task. And, so far, they seem determined to get aggressive with the insurance industry.” Cohn explains that the NAIC meeting is seeing a bit of controversy over the definition of the so-called “medical-loss ratio,” or the amount of premium dollars insurers spend on medical care compared to other activities (such as advertising). Cohn continues, “The Affordable Care Act stipulates that the HHS Secretary consider the [NAIC’s] recommendations when writing regulations. But it doesn’t say she has to follow it. If indeed the commissioners come down with a watered-down regulation, it will be interesting to see whether Sebelius goes along.”

Anthony Wright of Health Access adds, “The amount of money riding on the outcome” of the final decision on the MLR regulation “is huge. According to a study released last month by Health Care for America Now!, if the new law had been on the books in 2009, the six largest for-profit health insurance companies would have been required to refund $1.9 billion for that year alone.”

On a similar note, Steve Carroll of The Incidental Economist thinks insurers are looking at how to game the new regulations: “Anytime I hear someone claim that a law or regulation leaves relatively little to chance, I get a little shiver. Give credit where credit is due. Insurance companies are very, very good at what they do. And, while many politicians and activists are still campaigning and crying for a repeal of PPACA, you’re not seeing that from the insurance companies. They are (probably smartly) much more concerned with doing the best they can under the new landscape. I have no doubt they will succeed.” Carroll points to the way HMOs were able to enroll healthier patients in private Medicare plans.

In other health reform news, blogger and insurance agent Henry Stern explains why he’s charging a $50 retainer fee to anyone who wants help navigating the new high-risk pools: “As this is a ‘non-commissionable’ product, I feel justified in doing so. And what’s so ‘labor intensive’ about it? Well, consider that, in order to ’sell’ one of these, I need to complete and submit a special Broker Verification Form with each ‘application,’ and … this will require some fairly heavy pre-screening on my own part.”

Hot Air’s Ed Morrissey thinks an FDA advisory panel’s recommendation to decertify the Avastin for breast cancer treatment is in part due to health reform: “With the new ObamaCare regime in place, the issue of cost has now become openly part of the FDA process. This is a perversion of their mission, which is supposed to only involve product safety and effectiveness, not bean-counting. If Medicare doesn’t want to cover Avastin, that should be a separate issue handled by CMS and HHS. This strongly suggests that the FDA has become politicized to a degree where their recommendations lose credibility — a dangerous situation for consumers and providers alike.”

Jaan Sidorov of the Disease Management Care Blog says he’s “not going to vote for any candidate spouting silly rhetoric over the ‘repeal of Obamacare.’ The odds of prevailing against a Presidential veto are likewise questionable and the waste of political energy would also be atrocious. The only merit to a repeal debate is that every minute spent on that would be a minute less spent on crafting more ill-considered legislation — from both sides of the aisle. Our Republic deserves better.”

Health Beat’s Maggie Mahar responds to some liberals’ argument that a more progressive health reform plan could be put in place if Republicans succeed in repealing the health law: “I really don’t want to go there. First, I’m convinced that conservatives won’t be able to repeal the Affordable Care Act (ACA). Democrats will hold onto the Senate, and President Obama still has a veto. If necessary, he will use it to protect the bill. Meanwhile, the majority of the public either favors the legislation or want to ‘wait and see’ how well it works. Most voters would be utterly disgusted if Congress returns to the health care debate this fall. It was ugly the first time around; virtually no one wants to watch re-runs on C-Span.”

Katherine Hobson of The Wall Street Journal’s Health Blog discusses a new study that examined the demographics of those who remain uninsured in Massachusetts, which was a model for the federal health overhaul. Hobson notes, “Those uninsured adults were more likely than the insured to be male, young and single; to be a member of a racial or ethnic minority, or a non-citizen and to lack proficiency in English or live with adults who also didn’t speak English very well. They also had fewer years of school, higher unemployment rates, lower family income and reported greater financial stress than the insured, the researchers write.”

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