Legislators, Advocates Hope to Reform Insurance System

“By Erich Wagner
Capital News Service

Legislators and health care leaders announced a package of bills Wednesday that would increase the percentage of insurance premiums health insurers must spend on health care, as opposed to administrative costs and profits.

By increasing these ratios from 75 percent to 85 percent in the small group market and 60 percent to 80 percent in the individual market, the insurance administration can make sure more money goes back to consumers for medical procedures, said Ralph S. Tyler commissioner of the Maryland Insurance Administration.

These numbers haven’t been updated in more than 20 years, he said.

“”We believe they are unreasonably low and this is a necessary reform that should be made,”” Tyler said.

Delegate Heather Mizeur, D-Montgomery, said insurance companies must fall in line with the rest of the state by cutting down on amenities like CEO bonuses.

“”Just as our state government, small businesses and families have had to tighten their belts in these tough economic times, we believe health plans can surely afford to operate more efficiently as well,”” Mizeur said.

D. Robert Enten, a lobbyist for UnitedHealthcare, said Wednesday that he could not discuss the legislation.

Dr. Stephen Rockower, an orthopedic surgeon in Rockville, said increasing the percentage of premiums that goes to health care will preserve the quality and quantity of doctors in the state. As insurers lower their payments for procedures, doctors must reconsider their contracts with the companies, and even their ability to operate in Maryland, Rockower said.
“”If I’m a contracting doctor with a particular insurance company, I’ll accept what they’ll pay me,”” Rockower said. “”If that means getting paid more, I’ve got a better chance of staying in the plan than going out and trying to get more from the patients.””

The package would also provide greater protection for people with pre-existing conditions and ensure that Marylanders who buy insurance policies from out of state are aware of any discrepancies between their plan and state regulations, Tyler said.

Delegate Shawn Tarrant, D-Baltimore, said putting the burden of evidence on the insurance companies for proving the existence of disqualifying conditions will help to protect
consumers from loopholes in their insurance plans.

“”This way, we can make sure that people who have coverage keep their coverage,”” Tarrant said.

Delegate B. Daniel Riley, D-Cecil, said the state needs to make sure out-of-state companies are transparent when they offer residents insurance plans, and point out where their plan differs with regulations for in-state insurance companies.

“”When an out-of-state firm offers a product in Maryland, we should know everything about that bill, the consumer should know everything about that bill,”” Riley said. “”And the bill should come under the scrutiny of Maryland regulations and mandates.””

Carmela Coyle, president and CEO of the Maryland Hospital Association, said the goal of the legislation is to make the healthcare system fair for consumers again.

“”These changes will go a long way toward restoring the original intent of insurance,”” Coyle said. “”That is, sharing and spreading health risk across Marylanders rather than allowing insurance companies to avoid risk by excluding people who are sick or have conditions that really require healthcare.”””