At the Roundhouse: Insurance Companies in Tizzy over Transparency
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Who could be against greater transparency? In the midst of the big health care debate in Santa Fe, a modest little reform, which would greatly benefit consumers at no cost to insurers, is moving through the committee process. And it is arousing panicked opposition from an army of insurance company lobbyists.
Why are they so threatened?
SB 474, sponsored by Senate Jerry Ortiz y Pino (D-Bern), is a sensible bill that is hardly revolutionary. It certainly doesn't propose any major systemic changes to the health insurance, no onerous new regulations. Quite the contrary.
If anything, it's a bill that folks on both the left and right, free market skeptics and free market enthusiasts alike, can all agree on.
In a nutshell, SB474 merely gives consumers of health insurance, whether individuals or employers, more information upon which to make sound marketplace decisions. Good information means better choices. Everybody wins.
Here is the information that SB474 requires that health insurance companies disclose to consumers:
1. The commissions and other compensation that a broker or agent receives contingent upon the policy being issued. These are simply the fees for the middlemen who help companies select their plans.
2. The history of rate changes over the preceding 5 years for the type of policy being
considered. In other words, this shows the track record for rate increases over time. Pretty useful consumer information.
3. The medical loss ratio over the preceding 5 years for a policy with a substantially similar experience rating as the policy offered to the purchaser.
The last provision about "medical loss ratio" simply means that the insurance companies need to disclose to the consumer what portion of premiums paid go toward administrative overhead versus the portion of premiums paid that go toward actual health care services.
And here's the rub. All of this information is already compiled by the insurance companies! And they provide it to the state's Insurance Division. SB474 merely requires the insurers to also provide it to their customers. As simple as that. Thus, there is no additional cost.
Clearly this is not about greater regulation (routinely referred to by the industry as "onerous and burdensome"). Indeed what better defense for the industry to use against their dreaded bogeyman - "single payer" - than to show that they're giving the consumers the information they need to make rational, cost efficient choices? After all, isn't that what competition is all about?
It's good for individuals and businesses. Just ask the many harried and embattled HR professionals who handle the health plans for any medium-sized firm about their frustrations trying to find out why their premiums suddenly shot up 30%.
It's common sense really. In your other major purchases, like buying a house or a new car, you get a fully itemized disclosure of all of the costs - the fees, taxes, costs, etc. Why shouldn't you get as as detailed an explanation from the folks who specialize in numbers - the health insurance companies?
TAKE ACTION NOW
SB 474 made it through the Senate Public Affairs Committee on a 4 -2 vote.
Now SB 474 heads over to the Senate Corporations Committee.
Below is a list of the committee membership. Give them a call. Tell them to help out the consumer and small businesses by requiring reasonable transparency from health insurance companies.
The industry will try to bury this bill. Call SEN. SHANNON ROBINSON, the Chair of the Corporations Committee. Ask him to give this bill a fair and expeditious hearing -- and to support SB 474.
Shannon Robinson (D), Chair: 505-986-4856
H. Diane Snyder (R), 505-986-4375
Mark Boitano (R), 505-986-4375
Dianna J. Duran (R), 505-986-4701
Phil A. Griego (D), 505-986-4861
Stuart Ingle (R), 505-986-4702
Cynthia Nava (D), 505-986-4834
James G. Taylor (D), 505-986-4862
Why are they so threatened?
SB 474, sponsored by Senate Jerry Ortiz y Pino (D-Bern), is a sensible bill that is hardly revolutionary. It certainly doesn't propose any major systemic changes to the health insurance, no onerous new regulations. Quite the contrary.
If anything, it's a bill that folks on both the left and right, free market skeptics and free market enthusiasts alike, can all agree on.
In a nutshell, SB474 merely gives consumers of health insurance, whether individuals or employers, more information upon which to make sound marketplace decisions. Good information means better choices. Everybody wins.
Here is the information that SB474 requires that health insurance companies disclose to consumers:
1. The commissions and other compensation that a broker or agent receives contingent upon the policy being issued. These are simply the fees for the middlemen who help companies select their plans.
2. The history of rate changes over the preceding 5 years for the type of policy being
considered. In other words, this shows the track record for rate increases over time. Pretty useful consumer information.
3. The medical loss ratio over the preceding 5 years for a policy with a substantially similar experience rating as the policy offered to the purchaser.
The last provision about "medical loss ratio" simply means that the insurance companies need to disclose to the consumer what portion of premiums paid go toward administrative overhead versus the portion of premiums paid that go toward actual health care services.
And here's the rub. All of this information is already compiled by the insurance companies! And they provide it to the state's Insurance Division. SB474 merely requires the insurers to also provide it to their customers. As simple as that. Thus, there is no additional cost.
Clearly this is not about greater regulation (routinely referred to by the industry as "onerous and burdensome"). Indeed what better defense for the industry to use against their dreaded bogeyman - "single payer" - than to show that they're giving the consumers the information they need to make rational, cost efficient choices? After all, isn't that what competition is all about?
It's good for individuals and businesses. Just ask the many harried and embattled HR professionals who handle the health plans for any medium-sized firm about their frustrations trying to find out why their premiums suddenly shot up 30%.
It's common sense really. In your other major purchases, like buying a house or a new car, you get a fully itemized disclosure of all of the costs - the fees, taxes, costs, etc. Why shouldn't you get as as detailed an explanation from the folks who specialize in numbers - the health insurance companies?
TAKE ACTION NOW
SB 474 made it through the Senate Public Affairs Committee on a 4 -2 vote.
Now SB 474 heads over to the Senate Corporations Committee.
Below is a list of the committee membership. Give them a call. Tell them to help out the consumer and small businesses by requiring reasonable transparency from health insurance companies.
The industry will try to bury this bill. Call SEN. SHANNON ROBINSON, the Chair of the Corporations Committee. Ask him to give this bill a fair and expeditious hearing -- and to support SB 474.
Shannon Robinson (D), Chair: 505-986-4856
H. Diane Snyder (R), 505-986-4375
Mark Boitano (R), 505-986-4375
Dianna J. Duran (R), 505-986-4701
Phil A. Griego (D), 505-986-4861
Stuart Ingle (R), 505-986-4702
Cynthia Nava (D), 505-986-4834
James G. Taylor (D), 505-986-4862
