Times are changing: Insurers must adapt to increased oversight


The time when insurers "ran wild with no accountability" is over. Now they are set to "finally get some oversight" as HHS reviews large premium increases and identifies those that are unreasonable, HHS Secretary Kathleen Sebelius said in a Wall Street Journal opinion piece.

However, insurance companies have repeatedly argued that rising healthcare costs have forced their rates to increase, and that the Affordable Care Act doesn't adequately speak to that issue. Insurers consequently are concerned about how the health reform law will affect their bottom line.

Another key problem insurers have raised is that HHS has yet to define what an "unreasonable" rate hike is. The agency says it is working on regulation to define a reasonable increase in health insurance premiums. Meanwhile, agency officials have cautioned insurance companies against using the reform law as an excuse for health insurance premium increases beyond 1 percent to 2 percent.

Sebelius claimed the Affordable Care Act is merely bringing "some basic fairness" to the health insurance market. Insurance companies and their allies don't welcome this change, she says, because they have made large profits from the status quo. "These critics seem to believe that any oversight of the insurance industry is too much, and that consumers would be better off in a system where they have few rights or protections," Sebelius added.

Times are indeed changing. The health reform law already has provided 46 states with grants to beef up their premium-review and oversight capabilities. And Sebelius says more funding is on the way. Regardless of whether insurers agree with HHS, increased oversight is here. Insurers should start adapting accordingly.  - Dina

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