State Insurance Regulators Say Health Care Reform Must Address Costs

Testifying on behalf of the National Association of Insurance Commissioners (NAIC), Kansas Insurance Commissioner Sandy Praeger stressed that any health care reform out of Washington must address soaring costs.

Praeger spoke at a Senate Finance Committee roundtable discussion on expanding health care coverage. Praeger said that the problem of skyrocketing spending has stressed the entire health care financing system. “Health insurance reform will not solve this problem since insurance is primarily a method of financing health care costs,” said Praeger. “Whatever is done in insurance reform should be done in a manner that is consistent with sound cost control practices.”

Praeger welcomed Congress’s interest in helping states tackle the challenge of ensuring that affordable, sufficient health coverage is available to all Americans and conveyed the full support of the NAIC in developing federal legislation that will reach this goal.

Praeger also cautioned Congress against preempting patient protections, solvency standards, fraud prevention programs, and oversight mechanisms that states have in place to protect consumers. “As members of this committee know all too well, the preemption of state oversight of private Medicare plans has led to fraudulent and abusive marketing practices that would have been prevented under state law, bringing considerable harm to thousands of seniors,” she said.

Urging Congress to avoid prescriptive measures for states to follow, Praeger maintained that developing broad standards would maximize state flexibility to implement reforms in a manner that is responsive to local and regional market conditions. Such reforms include design and administration of health insurance exchanges, expansion of assistance to low-income persons, and development of cost containment strategies.

Preserving a strong state role in health care reform, Praeger also advised, would ensure the least amount of negative disruption. Since states will be starting from different positions, simultaneous changes “could cause severe market disruptions as young, healthy individuals find their premiums increasing several hundred dollars per month and may drop out of their coverage. If spread out over a period of years, however, the transition could be more smoothly implemented, especially if they are accompanied by subsidies,” she said.