Academy Activities

The Academy's Health Practice Council urged policymakers on Feb. 24 to base any oversight of health insurance premiums on actuarial principles (news release)--a response to President Obama's proposal to create a federal Health Insurance Rate Authority to enforce and monitor rate review. The council stressed that health insurance premiums should be adequate to pay projected claims, expenses, and supporting risk charges; that premium rating oversight should be done in conjunction with insurer solvency oversight; and that premium oversight requires strong actuarial representation.

The council submitted a letter on Feb. 23 to the policymakers invited to participate in Thursday's bipartisan health care reform summit (see below), reiterating the council's key criteria for viable reform and urging the policymakers to view these criteria as requirements for a sustainable health insurance system.

Legislative Updates

The House passed a bill on Wednesday that repeals the McCarran-Ferguson Act's current antitrust exemption for health insurers. However, the bill does not apply to medical professional liability insurers, which would retain their antitrust exemption. The Health Insurance Industry Fair Competition Act (H.R. 4626) passed by a 406-19 vote, but the bill appears not to have the same widespread, bipartisan support in the Senate, where it's expected to stall.

The Casualty Practice Council sent letters to Congressional leaders in January and February warning that stripping the exemption for medical professional liability insurers could preclude data collection and aggregation across companies, which may limit competition and potentially increase premiums. Academy member James Hurley also testified last October before the House Judiciary Subcommittee on Courts and Competition Policy concerning similar legislation.

The White House held its widely-publicized bipartisan summit on Thursday to discuss health care reform efforts with congressional leaders and their colleagues. The participants discussed health care reform issues, including cost controls, expansion of coverage, insurance market reforms, and deficit reduction.

The Obama administration unveiled its health care reform overhaul proposal on Monday. The plan is based largely on the reform bill passed by the Senate on Dec. 24 (H.R. 3590). The most notable change from both the House and Senate bills is the proposed Health Insurance Rate Authority, which would provide federal oversight of health insurance rate increases. Insurers would be required to submit their proposed premium increases to either state insurance authorities or the Health and Human Services Secretary for review.

Executives from Anthem Blue Cross and its parent company, WellPoint, testified on health insurance rate increases Tuesday before the California State Assembly's Committee on Health and Wednesday before the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations. This week's hearings were held after legislators learned of Anthem Blue Cross's plans to increase rates by as much as 39 percent for almost 800,000 individual health insurance customers in California.

In the News

Academy Senior Health Fellow Cori Uccello was interviewed for American Public Media's "Marketplace" on Feb. 22 (transcript /audio). Uccello explained the basics of determining health insurance premiums. She said it begins with ensuring that total premiums collected are adequate to cover claims and expenses.

The Academy's report on consumer-driven health plans (CDHPs) data was cited by Sen. John Cornyn (R-Texas) during a Feb. 25 Senate session broadcasted by C-SPAN2 (minute 75). According to research studies reviewed by the Academy's CDHP Work Group, these plans can save as much as 12 to 20 percent in health care costs.

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