Health Care

Insurance chiefs warn of interstate options

Three state insurance commissioners — including Sandy Praeger of Kansas — said Friday that they oppose interstate health insurance options, warning that they could increase costs and destabilize local markets.

Praeger was joined by Kim Holland of Oklahoma and Jane Cline of West Virginia in a conference call to talk about health reform efforts and how they would affect state insurance regulation.

Cline is president of the National Association of Insurance Commissioners; Holland is secretary-treasurer; Praeger is chairman of its Health Insurance and Managed Care Committee.

Interstate health insurance options would allow insurance companies to circumvent state laws and mandates, they said. Companies could seek approval for products in states with little oversight then sell those products in as many other states as they wanted.

"Those plans will ultimately cost more," Praeger said. "It really destabilizes the market... and allows for adverse selection and cherry-picking."

They said large insurers already can write policies across state lines — if they abide by each state's laws and regulations.

Praeger said the interstate options are being pushed by the U.S. Chamber of Commerce and others to get around state insurance mandates. "They would see this as an opportunity to provide those low-cost, limited-benefit plans."

The plans appeal especially to younger, healthier people whose disappearance from the larger insurance pool means higher rates for those left behind, she said.

The three insurance commissioners also opposed federal oversight of insurance rates, saying states are better able to make those decisions. "If we think the rate's excessive, we can deny it," Praeger said.

She said that looking only at rate increases when addressing the high cost of health care is wrong: "The rate is just the messenger that tells us health care costs are going up."

And she echoed concerns that have been raised by the Wichita Business Coalition on Health Care in noting that costs are driven by utilization. "We need to reward quality in the health care system, and not just quantity," she said.