New health law is uncharted terrain for administration, insurers

Aug 4 2010

The White House pressured insurers to begin covering kids with pre-existing conditions as soon as the health overhaul law was enacted, The New York Times reports. But after a few months, some insurers decided to stop offering "child only" plans altogether to minimize their losses. The give-and-take resulted in the White House saying insurers could limit enrollment to specific periods last week. "The tussle illustrates a larger point. Consumers and policy makers will be crossing treacherous terrain as they make the transition to a new health care system in the next three and a half years" (Pear, 8/2).

Politico: Meanwhile, to help move the health system forward, the federal government has enlisted a multitude of "agencies, boards and commissions created under the new health law." A recent Congressional Research Service report says estimates of the number are "impossible," and an accurate count is "unknowable." On example, according to the CRS report: The health law "requires the heads of six separate agencies within Health and Human Services to each establish their own offices of minority health" (Park and Barbash, 8/3).

Bloomberg News: Health insurers, for their part, "are seeking to influence how the new law will be implemented, and possibly change it, by campaigning for supportive congressional candidates. Senior government-relations staff from UnitedHealth, WellPoint, Humana Inc., Aetna Inc. and Cigna Corp. have been meeting for at least two months to discuss the plan, which may include creation of a $20 million war chest, said two people familiar with the matter. The group also is debating whether Karen Ignagni should remain as head of the trade group America's Health Insurance Plans, said a third person familiar with the discussions" (Armstrong and Nussbaum, 8/3).

The Hill: One pressing issue for insurers is expected to be settled soon. "State insurance commissioners are putting the finishing touches on their medical loss ratio forms, an official with their national organization said Monday afternoon. The form will help the Department of Health and Human Services calculate how much money insurers will have to reimburse their customers if they don't spend enough of their premium dollars on healthcare." The health law requires insurers to spend 80 percent to 85 percent -- depending on type of plan -- of premiums on medical services, but what counts under that category must be defined by regulators (Pecquet, 8/2).

Reuters: Amid the uncertainty, brokerage firm Edward Jones downgraded its view on health insurers. "U.S. health insurers are not worth the long-term investment risk in the wake of the new healthcare reform law," according to the brokerage, which shifted last week from a "hold" to "sell" position on the nation's three biggest insurers -- UnitedHealth Group Inc, WellPoint Inc and Aetna Inc. An analyst said, "We are concerned that market structure changes, profit limitations and rebates, and ever-present political/regulatory pressures will negatively impact future profit growth" (8/2).