The body that is enacting the biggest market change in the federal health reform–the building of a Health Insurance Exchange where individuals and small businesses will band together to buy coverage–spent much of its meeting Tuesday talking about its proposed guiding principles, mission statement, and vision statement. Despite the vague, high tone of the proposals, it struck me that the phrase "consumer protection" was not part of them.
There was little discussion and no votes regarding six legislative proposals that would affect the exchanges. That may because the insurance industry's chief desire–that the Exchange ask to be exempted from rate oversight by the state's regulators–was disposed of in a steamroller vote led by the board's two Schwarzenegger appointees at the last board meeting.
The rush to a vote in last month's meeting may have been because the newly appointed fifth board member, Robert Ross, wasn't at the July meeting of the board. In this meeting, he's steered wandering discussion back to the core issue of providing quality health care to everyone. The Schwarzenegger appointees, Kim Belshe and Susan Kennedy, no doubt feared that the presence of Ross would at least delay a vote and perhaps persuade two other commissioners not to even call for a vote on rate regulation in the Exchange.
The most substantial discussion was about proposed federal regulations governing the Exchanges–particularly one that seems to allow health insurance brokers to both advise people who are considering policies in the Exchange and take payment from insurance companies on policies sold outside the Exchange. Consumer groups correctly reacted with alarm: Brokers would have an incentive to steer the healthiest people away the Exchange and deliver these coveted custormers to insurance policies selling outside the Exchange. That would mean leaving the sicker, more expensive customers inside the Exchange.
The broker lobby strongly opposed any federal health reform. Brokers strongly oppose California's proposed law, AB52, to regulate health insurance rates. The brokers sent a letter –see pg 4–complimenting the Exhange Board for recommending that AB52 not apply to the Exchange). To think that they could fairly and simultaneously advise consumers about Exchange and outside-the-Exchange health insurance is a fantasy.