Originally published Friday, February 1, 2008 at 12:00 AM
Insurance-rate oversight OK'd by state Senate
The state Senate has overwhelmingly passed a measure that would restore authority to state officials to reject "unreasonable" rate increases...
Seattle Times health reporter
The state Senate has overwhelmingly passed a measure that would restore authority to state officials to reject "unreasonable" rate increases for individual health-insurance plans.
Critics charge that the bill, which is also expected to pass the House, wouldn't actually give much relief to consumers who are reeling from steep premium increases. Nonetheless, it's expected to easily pass the House and cruise to the governor to sign.
The measure, Senate Bill 5261, would allow the Office of the Insurance Commissioner to review and approve annual rate increases for individual health plans. The state already has that power for small-group plans, but Insurance Commissioner Mike Kreidler and others have argued that the lack of oversight on individual plans has enabled insurers to raise premiums more than necessary.
All the state's major insurance companies oppose the bill, saying it would interfere in the market and wouldn't deal with growing medical costs.
But unlike last year, when the bill died in the House after clearing the Senate, the measure this time seems likely to become law. The Senate passed it on a 31-18 vote.
Critics say the bill would require insurers to pay out in medical claims as much as 77 cents for each premium dollar they collect, up from 72 cents currently. But even the insurance commissioner's office concedes the increase may not benefit consumers much: Almost all insurers already pay out more than that.
What's more, if the insurers pay out too little in medical claims, the extra premiums would be returned to the state, not to policyholders.
Still, Beth Berendt, Kreidler's deputy insurance commissioner for rates, said the bill would force insurers to think twice about inflating their proposed rate increases. Right now, insurers are required to simply notify the state of any rate changes.
The bill gives us "the ability to challenge assumptions that are unreasonable," Berendt said.
But the state's scrutiny might not have much actual effect on rates. For instance, between 2003 and 2007, the insurance commissioner's office reduced proposed premium rate increases for small-group plans by an average of just 1 percentage point annually. So instead of an average increase of 12.6 percent for each of those five years, consumers actually saw their rates go up by 11.8 percent.
Brian McCulloch, a Shoreline insurance consultant and a longtime Kreidler foe, calls the bill "almost meaningless."
McCulloch, who has twice run for insurance commissioner, supports another proposal, House Bill 1203, that would regulate premiums by limiting insurer surpluses, a financial cushion.
McCulloch says the state's largest insurance companies — Regence BlueShield, Premera Blue Cross and Group Health Cooperative — are sitting on a collective $1.4 billion in "excess" surpluses — money he argues should be returned to consumers.
Kyung Song: 206-464-2423 or ksong@seattletimes.com
Copyright © 2008 The Seattle Times Company
Others states' fights bring focus to Daniels
NEW - 07:13 AM
South Carolina Gov. Nikki Haley is writing memoir
Bill would make jail mug shots available
Immigration, license bill voted down in state Senate
Rival Texas bills require sonograms before abortions

nwautos
Turismo upgrade "Gran Turismo 5: XL Edition" for PlayStation 3 has features such as new car-tuning settings, new NASCAR vehicles, better replay video...
Post a comment
- Lakewood cop accused of embezzling $150K meant for slain officers' families
- 3 big health insurers stockpile $2.4 billion as rates keep rising
- Agency set to investigate handling of 911 call about Josh Powell
- Quick decisions: How Washington hired its new football staff
- Historic day for gay marriage as another fight looms
- Justin Wilcox's versatile defensive style is the right fit for Huskies | Jerry Brewer
- It's Terrence Time: Enigmatic Ross leads Huskies
- Social worker recounts minutes before Powell fire
- $25B settlement reached over foreclosure abuses
- Club promoter convicted in brutal 2010 murder of Des Moines prostitute
- Gay-marriage bill passes House, awaits Gregoire's signature
434 - Historic day for gay marriage as another fight looming
346 - Sheriff's office unhappy with 911 dispatcher in caseworker's call
282 - 3 big health insurers stockpile $2.4 billion as rates keep rising
235 - Source: NY, California to sign mortgage settlement
208 - Oregon live game thread
153 - Pac-12 picks ... including the UW game
140 - Lakewood cop accused of taking donations for slain officers' families
114 - Department of Justice owes the Seattle Police Department an apology
88 - Thursday morning links --- and a video!!!
72
- 3 big health insurers stockpile $2.4 billion as rates keep rising
- State Medicaid program to stop paying for unneeded ER visits
- One man's audacious pursuit of sailing history
- Darren Berg gets 18-year sentence for Ponzi scheme
- $25B settlement reached over foreclosure abuses
- A wandering gene's destructive path | Book review
- 'Gauguin and Polynesia': dazzling mix-and-match | Art review
- UW opening incubator facility for startups
- Controversial principal at Lowell Elementary takes job in Tacoma
- Lakewood cop accused of embezzling $150K meant for slain officers' families










