Battle Over Rate Review Begins

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Battle lines formed over rate review regulations: Health insurers are squaring off against providers and consumer advocates as regulators debate how to structure the healthcare reform law's rate review requirement.

In comments due Tuesday, the American Medical Association and Consumer Watchdog both pressed regulators to make as much rate information as possible public so consumers can review the rates. Health plans, however, argue that "release of confidential and competitive information into the marketplace jeopardizes competition and innovation."

It's the prices, stupid: America's Health Insurance Plans (AHIP) counters that regulators would be ill-advised to inflexibly limit rate increases when insurance costs only amount to 4 percent of national health expenditures.

"Health plan solvency is threatened if these costs continue to grow unabated, but actuarially justified rate increases are not allowed to go into effect," AHIP says.

Specifically, AHIP is asking regulators to:

• Delay the July 1 deadline by which states must put in place "effective review" programs or risk the Department of Health and Human Services taking over;

• Rethink the idea of establishing a specific rate increase (10 percent, for example) as the trigger for review. Doing so, AHIP argues, fails to capture geographic variations, risk and adverse selection, medical inflation and the costs of compliance with the new law; and

• Delete subjective criteria such as the requirement that states conduct "an effective and timely review."

Not so fast: And then there's the libertarian viewpoint. Americans for Limited Government argues in its unusual comments that the regulation itself is misguided, especially after a federal judge ruled that the whole law is unconstitutional.

"The current administration, to foster its ideological belief that a 'benevolent' government is needed to oversee corporations presumed to be evil, must have tools it can use to propagate its ideology to the public," the group said. "This proposed regulation is merely a propaganda tool for those who believe in more government control."

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