State Lawmakers Accuse Feds of Insurance Power Grab

March 31, 2017 at 11:00 AM
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State lawmakers with an interest in insurance are taking on their federal counterparts.

The leaders of the National Conference of Insurance Legislators are fighting two health insurance bills that were popular with House Republicans: H.R. 1101, the Small Business Health Fairness Act, and H.R. 372, the Competitive Health Insurance Reform Act of 2017.

Tom Considine, the chief executive officer of NCOIL, and Steve Riggs, NCOIL's president, have written letters opposing the bills, and accusing supporters of the bills of attacking the traditional state-based insurance regulatory system.

Riggs, a Democratic state representative from Kentucky, said in a statement that state oversight of insurance workers is better than federal regulation because state officials are easier for consumers to reach.

"Giving more power to Washington, D.C., over insurance matters is a recipe for disaster," Riggs said.

H.R. 1101 would, in effect, give small employers a new way to avoid the fully insured small-group plans regulated by their home states. Small employers could opt instead to sign up for coverage from multi-state association health plans that would be regulated by officials in the association's home state.

House members voted 236 to 175 to approve that bill March 22. All but four of the 179 Democrats who voted supported H.R. 1101, and all of the Republicans who voted supported it.

Considine and Riggs have written letters asking the leaders of the Senate Health, Education, Labor and Pensions Committee, which has jurisdiction over H.R. 1101, to reject that bill.

In the past, the managers and regulators of association health plans have had a hard time keeping multi-employer plans solvent, Considine and Riggs said.

H.R. 372 would change the version of the McCarran Ferguson Act antitrust rules that now governs health insurers. Insurers say the current exemption exists mainly to help insurers created the big databases and data analysis projects needed to understand health insurance claim trends, and that the exemption has nothing to do with mergers, acquisitions or price fixing.

But H.R. 372 attracted strong support from House Democrats as well as House Republicans. The House passed that bill March 22 with a 416-7 vote. The seven representatives who voted against it were all Democrats.

Considine and Riggs asked the leaders of the committee with jurisdiction over H.R. 372, the Senate Judiciary Committee, to which has jurisdiction over H.R. 372, to reject that bill.

The current antitrust provision for insurers "creates consumer choices by granting choices the ability to share loss history and other information," the NCOIL leaders wrote. "Without loss history data, smaller and medium-sized companies, which do not have the business volume to develop actuarially credible rating information, would be unable to compete with larger companies that are less dependent on industrywide data."

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