A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Happiest Place on Earth Report (Updated)

Happiest Place on Earth Report (Updated)

October 20, 2010

Georgia Maheras, HCFA's Private Market Policy Manager, is in Orlando this week as a consumer representative at the National Association of Insurance Commissioners fall meeting. She's one of 28 designated consumer voices, competing with thousands of insurance industry lobbyists for the ears of the 50 state insurance commissioners. Massachusetts Insurance Commissioner Joseph Murphy is in attendance.

NAIC normally stays out of the headlines. But the ACA gives NAIC first crack at recommending the arcane details that determine the reach of the Medical Loss Ratio (MLR) rules. Georgia wrote about the context of the issue on the Healthy Blog in August. The showdown votes at NAIC will come tomorrow. At issue is holding insurers to the standards that determine how much of the premium dollar goes to medical care, and how much goes for administrative costs and profit.

Today's Politco Pulse report gives a good a rundown on the latest maneuvering. And the blog post by fellow consumer representative, former insurance executive Wendell Potter, gives a good flavor of the atmosphere:

I am writing this between meetings at the fall conference of the National Association of Insurance Commissioners (NAIC) here in Orlando. I am one of 28 people selected by the NAIC to represent the interests of consumers. The insurance industry and other special interests are represented here by more than a thousand lobbyists. Like us, they are pacing the hallways waiting to pounce on the commissioners when they emerge from their "regulator-to-regulator" meetings that are closed to the public and the media. It is at these closed-door meetings that some of the most important discussions are taking place, and decisions are being made.

At its summer meeting in Seattle two months ago, the NAIC approved preliminary regulations that represented a reasonable compromise between our positions and those of the industry. The big, for-profit insurers -- including United and WellPoint -- were not at all happy, so in the days leading up to this meeting in Orlando, they dispatched teams of lobbyists to state capitols across the country to cajole and threaten commissioners into seeing things their way. ...The central message of the lobbyists who were deployed from coast to coast as part of their most recent fear-mongering campaign is that they will stop covering people in states where they don't think they can make the profits Wall Street expects them to make if the new "medical loss ratio" (MLR) rules don't cut them enough slack. (Insurers consider the amount of money they pay out in medical claims to be a loss.)

Insurers sent their lobbyists across the country to meet personally with the insurance commissioners (and lobbyists are as thick as thieves here in Orlando) because they want the commissioners to give them the slack they need to continue being able to push their MLRs down to what will be a legal minimum next year. The more they can get the commissioners to write the often obscure but critically important rules in their favor -- even if those rules violate the health care reform statute -- the happier it will make Wall Street. That is what is really going on here. It is as simple as that.

We'll all be watching what happens tomorrow.
-Brian Rosman

UPDATE: Community Catalyst blogs Wednesday afternoon with the latest news, not looking good.