Senate Bill 5247 grants the Office of the Insurance Commissioner authority to take into account rather sizeable surpluses maintained by non-profit health insurers when reviewing proposed rate increases by those companies.
The other measure, House Bill 2319 and Senate Bill 6178, each requested by Kreidler and Gov. Chris Gregoire, sets the ground rules for the state’s fledgling Health Benefit Exchange approved by lawmakers last year.
Both pieces of legislation could help hold down costs for individuals and small group plans as the state and the nation enter the uncharted waters of health care reform.
In recent years, the three major health insurers in the state – Premera Blue Cross, Regence BlueShield and Group Health Cooperative – have amassed more than $2.4 billion in surplus revenues. And remember: all three are nonprofit companies.
It’s important to note that surpluses are different from reserves, which is money set aside to pay future claims.
It may be that all the uncertainty over health care reform has led to an increase in the surpluses. But, according to Kreidler, it’s an amount of money equal to about six months of operating expenses for the three companies. The Office of the Insurance Commissioner believes that’s about twice the necessary amount,
“Imagine if the state had this level of a rainy day fund,” Kreidler said.
The bill has a simple goal: It requires the Office of the Insurance Commissioner to review nonprofit health insurers’ surpluses when determining if proposed rates are reasonable.
In the current climate, where insurance premiums and co-payments rise as coverage grows tighter, it could be a useful tool in protecting consumer interests.
The other legislation deals with the Health Benefit Exchange created by the 2011 Legislature. In effect, the exchange is a one-stop supermarket for those seeking to purchase individual health insurance policies in preparation for the major, nationwide expansion of health insurance set to begin Jan. 1, 2014.
This state is one of 13 in the country that has made progress in setting up health benefits exchanges. Washington, D.C., has also made progress. The state exchange, housed at the state Health Care Authority is supposed to create a level playing field for all health plans and encourage insurers to compete on cost, quality and customer satisfaction.
Other states, many of them Republican-controlled – are sitting on the sidelines, waiting to see who wins the presidential election or waiting to see if the U.S. Supreme Court this summer rejects or significantly alters the health care law.
While it is a daunting task preparing for 2014, the residents and small businesses of this state are better served by proactive efforts rather than wait-and-see tactics.
If the law is upheld, states that don’t have their health insurance marketplaces built will default to a one-size-fits-all federal plan that may not be in synch with the needs of a particular state.
Kreidler is the first to admit there is much more to be done to prepare the exchanges and other insurance infrastructure in advance of 2014. But at least this state is making progress.
The House and Senate companion bills further the cause. They will help establish the exchange rules and confirm the insurance commissioner’s authority to regulate insurer rates and benefits both inside and outside the exchange.
Here in Washington state, some 1 million people live without health insurance. That’s about 14.5 percent of the state population. Add the under-insured and the number may double, Kreidler said.
In Thurston County, more than 27,000 residents lack insurance, or about 10.7 percent of the population. The rate of uninsured is lower than the state average due in large part to the high number of state government workers, who, as a group, are more likely to be insured.
Preparing for 2014 in the health insurance arena is a daunting task, aided somewhat by passage of these bills.
