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Northwest Passages II: Washington -- This Is Good.

Northwest Passages II: Washington -- This Is Good.

March 5, 2008

Second article from today's Kaiser Health Policy Report:

Washington: The Washington House on Friday voted 68-21 to pass a bill (SB 5261) to require insurers to receive approval from the state insurance commissioner before changing premium rates for individual health plans. Gov. Chris Gregoire (D) is expected to sign the bill. In January, the Senate voted 31-18 to approve the measure. The bill would give state Insurance Commissioner Mike Kreidler the ability to reject "unreasonable" rate proposals and compare insurers' claims costs with projections. He also would be able to order insurers to return excess profits to the state.

Supporters hope the measure will slow rising premiums, which have increased as much as 20% in the past year. Insurers say the bill will penalize them while ignoring the causes of high health costs. Jeff Roe, president and CEO of LifeWise Health Plan of Washington, said, "Suppressing rates artificially does not address the underlying issues," adding, "This is like trying to avoid a storm by demanding a different weather forecast." Roe predicted the bill will "reinforce Washington's reputation as a highly regulated insurance market" and ultimately hurt policyholders by decreasing competition and keeping new insurers out.

It is "very telling" critics of the legislation "say that having to justify rate increases will serve to discourage companies from providing individual policies," according to a Seattle Post-Intelligencer editorial. "It almost makes it seem like being asked to play fair would make those insurers not want to play at all, which we strongly suspect won't be the case," the editorial states, adding that insurers "just might find themselves with slightly smaller surpluses, and possibly, more satisfied customers." The editorial concludes, "Think of this as one small step in the right direction: health care reform."