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States Balk At Enforcing Health Law’s Insurance Protections

By Phil Galewitz

March 19th, 2013, 1:05 PM

Florida regulators won’t penalize insurance companies that violate new health law consumer protections that take effect in January but will report them to the federal government, according to an agreement between the state and federal officials.

Citing lack of money and legal authority, Pennsylvania’s top insurance regulator hasn’t decided whether his agency can enforce the provisions, which include some of the most popular elements of the 2010 federal health law, such as requiring insurers to provide coverage to all applicants regardless of their health status, prohibiting insurers from charging more based on gender or health, and greatly limiting what insurers can charge for premiums based on age.

Four other states— Texas, Missouri, Oklahoma and Wyoming — have informed the Obama administration that they can’t or won’t enforce the law. Some officials say they have not received the authority they need to do so from their state legislatures.

While federal officials say they will step in if necessary, policy experts note they have little experience enforcing health insurance laws and few resources in states to do it.

“HHS has no real record of enforcing health insurance rules in the states,” said Jay Angoff, who was in charge of developing the new online insurance marketplaces for HHS and is now a partner at the Washington, D.C., law firm Mehri & Skalet.

To be sure, many states have agreed to oversee the changes – including the 16 states, plus the District of Columbia, that won conditional approval to set up their own insurance exchanges. Even some states that defaulted to a federally run exchange, such as Texas, Mississippi, South Dakota and Alaska, have agreed to enforce the new provisions.

“We don’t pick and choose which laws to enforce or not enforce,” said Aaron Sisk of the Mississippi Insurance Department.

Associate Texas Insurance Commissioner Katrina Daniel said her state does not have legal authority to enforce federal insurance laws. “We will not be enforcing the federal law,” she said Wednesday. That means any complaints on insurers not following the new provisions will be forwarded to the federal government.

The enforcement issue needs to be settled now because health plans are beginning this month to submit insurance products to state regulators that they hope to sell in the new online marketplaces beginning this fall. If states balk at reviewing the plans for compliance with Obamacare rules, insurers could face oversight from both state and federal regulators. It’s unclear what impact that would have on consumers seeking help.

“We will see a lot of variability,” in how the law is enforced, said Alan Weil, executive director of the National Academy of State Health Policy. But Weil noted that’s no different than today with some states approving insurance rates before policies are sold and many that do not.

A Commonwealth Fund report last month found just 11 states and the District of Columbia had begun to change state laws to give their insurance regulators authority to enforce the law.

Wyoming’s Deputy Insurance Commissioner Stephanie Bryant McGee said her agency does not currently have that authority. But she said her staff has been successful on getting voluntary compliance by companies, and “I assume we will continue to similarly communicate with insurers in the future.”

She said she has been notified the federal government will also step in if need be.

Montana and Delaware have also agreed to evaluate plans and respond to consumer complaints, but leave any enforcement penalties to the federal government.

Pennsylvania Insurance Commissioner Michael Consedine said his reviewers could add the federal provisions to their annual audits of insurance plans, but he said it’s unclear if they have the legal authority to penalize violators. He said lack of funding may also impede enforcement efforts. “We may need help with having the dollars to do this,” he said.

Gary Cohen, director of the federal Center for Consumer Information and Insurance Oversight, said the administration has been in talks with states for months to persuade them to enforce the new rules. Cohen said states are in a better position to do it because they already enforce state health insurance laws.

7 Responses to “States Balk At Enforcing Health Law’s Insurance Protections”

  1. Health insurance is very important to every people. In fact the government should look after health insurance laws as to make sure some health insurance companies provide ample insurance for people under them

  2. John Silver says:

    The problem with this is the the PPACA is the law of the land, upheld by the Supreme Court.
    Federal law trumps State law.

    Citizens in these states deserve better, and if they could pull their collective heads out of their ideology, they would see that this law is not only needed, but beneficial to each states citizens. Read each provision seperately, and they make absolute sense. Put President Obama’s name to it and there is almost automatic rejection.

  3. John Silver says:

    As for Texas, I’ve never seen a state so in need of a massive enema.

  4. Barbara says:

    US is a worst country in the world when you look into care for sick .As a human being I am ashamed . Sickness is a bussines here and big insurance companies will not part with monies from customers and they are not very eager to pay for services hospitals provide. Over the time hospitals and healthcare centers developed ways to get paid for the services that are not always honest like doing more expensive procedures or are not able to car for really sick patient . where in he world a sick patient is dissmissed form the hospital because insurance is not covering the stay …just to be admitted again next day . My dying aunt went throught this process 8 times in 20 days and then she died . I never forget the scene like her husband carried her verry very sick to the car in her night gown …just to bring her back next day and wait to be admited for 6 hours in nightgown in wating room full of sick .!!!???!!!???Upseting and scary to become old and sick in US

  5. d.a. sinadinos says:

    I would invite you all, especially Mr. Silver, to actually read the law before you spout off about how wonderful it is. There is NO WAY this law will do anything but raise health care costs SIGNFICANTLY for everyone (at least for those who actually pay for coverage)
    You cannot remove all risk control and underwriting practices from an insurance product and expect cost to go lower….and if you beleive it will, you are either extremely ignorant of how the insurance market works, or you are simply drinking the cool aid of the Obama administrations lies, misrepresentations and fact distortions. This law was sold under the premise that if EVERYONE paid for health care coverage, cost would lower. Yet, the law exempts a huge portion of the population from the individual mandate. Additionally, the penalty for NOT buying coverage is only $95 (first year), but a health policy will cost upwards of $3000…do the math. When you are allowed to jump in anytime, you can refuse to buy coverage until such time that you are stricken with a disease or need extensive surgery. This is what is referred to as adverse selcetion…only those who are sick or are high risk consumers will buy the policy…..which wil make the system finacially unsustainable. Tthis fact alone may likely make the system collapse like a house of cards, and the impact this law will have on the overall economy will be disatrous as unemployment will rise, hiring will be significant slowed, taxes will be significantly higher, and health care access will be severly restricted. The promise of “free healthcare for all” sounds so appealing that most folks have failed to look at how this will really impact our health care delivery system, its associated costs and the overall eceonomy. For those who support this law, when you lose your job, and/or are forced to pay astronomically higher taxes, you have no basis to complain one bit…

  6. SG says:

    It is really sad that patients on public aid not only have difficulty in finding someone to provide care but the services that are covered are very limited. For example, a patient can have a surgery covered to correct a problem but benefits won’t provide coverage for services to prevent the surgery in the first place! Healthcare is messed up. Providers don’t get paid for good care, they only get paid for procedures, prescriptions, and tests but only if the insurance company will allow the type of services recommended and they have to fail a number of prescriptions first before the best choice drug or treatment will be covered and that is if you can convince the insurance company that it is necessary. Good luck with Obama care. Now working people will be paying a premium to the feds to cover insurance for those who will be entitled to crappy coverage with a string of limitations just like public aid. Providers will be spread even thinner as costs go up because providers are paid less for their services.

  7. Max Herr says:

    D.A. Sinadinos has it 100% correct. And I’ve been saying virtually all the same things for the last four years. The only thing I add is that this is simply another tool in the socialist arsenal to make Americans utterly beholden to the federal government as nursemaid. The Democrats were too wishy-washy to vote in a single-payer health care system (perhaps knowing that it, like Medicare, would simply accelerate the economic downfall of America).

    But when you read the law — all 1000 pages of it, plus the scads of regulations promulgated by HHS — you will realize that the excise taxes that will be imposed on the health insurance industry beginning on January 1, 2017 will force most of the smaller health insurers out of the market, and the big boppers will soon retreat as well because they will not be able to make a profit.

    As I teach it to my insurance classes, Insurance companies are in business to make money. They stay in business by paying claims. Insurance companies that cannot make a profit soon stop paying claims and are taken over by state insurance regulators. The problem is, the state Guarantee Funds will soon become exhausted because their ruled require that they pay claims 100% — but only up to a statutory limit, which may actually be unlawful under PPACA, which provides for unlimited health care expenses in one’s lifetime — funding shortfalls are made up by the other insurance companies in the market. When the insurance companies are all gone, the states won’t have the resources to pay claims, and without a commercial health insurance industry — voila! The federal government will have to step in with Medicaid and Medicare for all.

    And guess what? We cannot afford that either. Everything is being promised as “free”. The Newtonian equal and opposite law of physics applies — free health care = excessively higher taxes to pay for it. Or massive government debt to cover it. Or both. And that, folks, is the death knell of the American civilization.

    Obamacare is one of the nastiest hoaxes perpetrated on the American people. Do we need some reforms in health care? Absolutely. Doing away with preexisting condition exclusions and guaranteed acceptance were needed. But you have to let insurance companies cover the risk of claims that those folks will certainly present. You cannot force standard rates for everyone on insurance companies. It will not work.

    Had Congress actually chosen to work with the health insurance industry, instead of casting it as the villain, health care reform could have worked. But when you tell capitalists that their days of raising capital are numbered, their only choice is to retreat. We spent the better part of 40 years fighting Soviet communism, which self-destructed because its implementation was flawed and its central government corrupt. Corruption is King inside the Beltway, but they are very adept at keeping hidden. Our politicians learned nothing from the rise, fall, and collapse of the Soviet Union. And, truth be told, the fiscal sinkhole they encountered was a place called Afghanistan.

    Gee, Molly!
    What, Fibber?
    Is the Afghanistan the American soldiers are fighting and dying in for the last ten years the same Afghanistan that the Russians got their a$$ kicked in?
    Of course, it is, Fibber. It’s a very small world we live in.

    “Those who cannot remember the past, are condemned to repeat it,” wrote George Santayana in his “Reason In Common Sense”, published in 1905. It stands to reason that there is almost no one with an ounce of common sense in Congress.

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