Insurance commissioner to call shots on health policy rate increases
03 03 08 - 13:05
By BRIAN SLODYSKO
P-I REPORTER
OLYMPIA -- After eight years of unregulated insurance company control over health insurance cost increases, the Legislature -- concerned over double-digit annual rate rises -- has returned control of health care premium increases to the state insurance commissioner.
The House on Friday passed Senate Bill 5261, granting the insurance commissioner oversight of rates in the individual policyholder market, which has been hit the hardest by insurance rate increases. The bill's passage by a vote of 68-26 is seen as a measure of the dwindling credibility insurance companies have with legislators here. Gov. Chris Gregoire is expected to sign the legislation.
A similar bill was proposed last year, but leading Democrats, with assurance from health care providers that rates wouldn't increase, killed it.
But rates did increase -- in some cases by as much as 40 percent. And the increases were set to a backdrop of record profits by insurance companies.
"There were a lot of legislators who felt like they got burned on that one. We held the bill, and then they boosted rates as soon as we left last year," said House Majority Leader Lynn Kessler, D-Hoquiam.
By some estimates, insurance companies are sitting on surpluses totaling $1.4 billion. A measure that would have refunded the surpluses failed to make it out of committee earlier this year.
This "makes me feel like I'm actually doing my job now rather than telling (people) I don't have the info or authority," said Insurance Commissioner Mike Kreidler.
Kreidler said last year's rate increase and the use of surpluses by the nonprofit company Premera Blue Cross to cover the losses of a for-profit Arizona subsidiary, were the tipping point for the bill.
Republicans blasted the bill, saying that increased regulation of the market would drive costs up, not down.
"The problem is that the history has not been that way. Prices are going to keep going up" because "we've screwed this thing down so tight that nobody wants to compete for health care dollars," said Rep. Bill Hinkle, R-Cle Elum -- a concern acknowledged by Kessler. She said it was a major reason she did not support the measure last year.
In comparison with other states, Washington has relatively few individual health insurance providers. Hinkle said the state could expect to see a lot fewer now because, while the bill gives the commissioner control over rates, it will serve as a disincentive to companies thinking about expanding into Washington.
"If anything, this is going to help the insurance companies protect their market. Because nobody is going to come here to compete," he said.