Insurers overdue for closer scrutiny
The New Mexican
Posted: Tuesday, February 22, 2011 - 2/23/11
Posted: Tuesday, February 22, 2011 - 2/23/11
Back in August, when Blue Cross Blue Shield of New Mexico railroaded another premium increase past our state's insurance regulators, company lawyers and executives were greatly aided by laws they had slid through our state Legislature limiting the scrutiny the state could apply to health insurers.
Those laws allowed them to say, with a straight face, that their company was losing money on individual health policies; thus the need for a squeeze on their clients.
But, said consumer activists, these guys are running a $7 billion surplus; why not apply some of that money to the $11 million they're claiming in individual-coverage losses?
Ah, those are our reserves — and under New Mexico statutes, they're not part of the rate-hike discussion ...
The insurance superintendent's hands were tied — and 40,000 individually insured New Mexicans' wallets were lightened with a 20 percent rate increase.
But the flavor of the insurance guys' celebratory martinis might have had a bitter aftertaste — for among their momentarily frustrated opponents was Sen. Dede Feldman, D-Albuquerque, that longtime champion of consumer rights. Clearly, she figured, it was time for tougher standards of reasonability in rate-setting.
She introduced SB 208 in the current legislative session. It's notable — and laudable — for a double-barrel approach to health insurers:
For good measure, the bill would give the Public Regulation Commission veto power over disputed rate increases.
How 'bout that? Giving our state's five commissioners what they should have had all along — and spreading sunshine over the rate-setting process. New insurance superintendent John Franchini and Attorney General Gary King figure, properly enough, that this is long-overdue reform.
The health-insurance bloc, predictably, opposes it. Its lobbyists say reform's already been made — by the last Legislature, which passed a law making insurers spend at least 75 percent of premiums on medical care for individual clients, and 85 percent of that money on holders of group policies.
But 75 percent and 85 percent of some mysterious amount insurers would just as soon not disclose, and would do all they could to camouflage? Sen. Feldman's call for transparency, in this era of public-be-damned behavior by publicly regulated industries, is especially urgent. Her bill passed the Senate's Public Affairs Committee by a 7-1 vote — strong evidence of bipartisan support. It goes before the Judiciary Committee on Friday.
The rest of the Senate, and the House of Representatives, must recognize their fellow New Mexicans' need for clarity in health-insurance ratemaking — and address it in our state's statutes.
Those laws allowed them to say, with a straight face, that their company was losing money on individual health policies; thus the need for a squeeze on their clients.
But, said consumer activists, these guys are running a $7 billion surplus; why not apply some of that money to the $11 million they're claiming in individual-coverage losses?
Ah, those are our reserves — and under New Mexico statutes, they're not part of the rate-hike discussion ...
The insurance superintendent's hands were tied — and 40,000 individually insured New Mexicans' wallets were lightened with a 20 percent rate increase.
But the flavor of the insurance guys' celebratory martinis might have had a bitter aftertaste — for among their momentarily frustrated opponents was Sen. Dede Feldman, D-Albuquerque, that longtime champion of consumer rights. Clearly, she figured, it was time for tougher standards of reasonability in rate-setting.
She introduced SB 208 in the current legislative session. It's notable — and laudable — for a double-barrel approach to health insurers:
- It tells them to open their balance books to the state when they seek rate increases. How much are they paying their executives? How much money do they have stashed away? Let's see your bottom line ...
- Then let those and other financial factors be part of the state insurance division's decision making.
For good measure, the bill would give the Public Regulation Commission veto power over disputed rate increases.
How 'bout that? Giving our state's five commissioners what they should have had all along — and spreading sunshine over the rate-setting process. New insurance superintendent John Franchini and Attorney General Gary King figure, properly enough, that this is long-overdue reform.
The health-insurance bloc, predictably, opposes it. Its lobbyists say reform's already been made — by the last Legislature, which passed a law making insurers spend at least 75 percent of premiums on medical care for individual clients, and 85 percent of that money on holders of group policies.
But 75 percent and 85 percent of some mysterious amount insurers would just as soon not disclose, and would do all they could to camouflage? Sen. Feldman's call for transparency, in this era of public-be-damned behavior by publicly regulated industries, is especially urgent. Her bill passed the Senate's Public Affairs Committee by a 7-1 vote — strong evidence of bipartisan support. It goes before the Judiciary Committee on Friday.
The rest of the Senate, and the House of Representatives, must recognize their fellow New Mexicans' need for clarity in health-insurance ratemaking — and address it in our state's statutes.
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Posted by: Caverta | November 23, 2011 at 06:07 AM
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Posted by: Senior Planning NJ | July 11, 2011 at 10:51 PM
Hi my e-mail is dedefeld@comcast.net and my website is at www.dedefeldman.com
Posted by: Senator Dede Feldman | March 18, 2011 at 01:24 PM
While rate payers suffer huge premium increases, BCBS insurance executives receive big bonuses. With a surplus of $6.7 billion earned from premium increases like the one in New Mexico and other states, Health Care Services Corporation (HCSC - a parent company to NM Blue Cross and Blue Shield and others), has doled out huge salaries and bonuses to its executives. The presidents of the Illinois and Texas divisions, meanwhile, saw their compensation packages rise by two-thirds and 150 percent, respectively, from 2008 to 2009, mostly driven by the size of their bonuses. One can only wonder how much Elizabeth Watrin, President of NM Blue Cross and Blue Shield, is getting in her compensation package as her counterparts in other states have benefitted from enormous increases. This needs to be part of the rate hearings!
Posted by: GF Alexander | March 07, 2011 at 08:19 AM
Dede,
My name is Barbara O’Brien and I am a political blogger. Just had a question about your blog and couldn’t find an email—please get back to me as soon as you can (barbaraobrien(at)maacenter.org)
Thanks,
Barbara
Posted by: Barbara O'Brien | March 02, 2011 at 08:55 AM