Pogue: Legislature Missed A Big Opportunity To Better Protect Health Insurance Consumers
The biggest news with health insurance in the 2013 legislative session is what did not pass. Before it started, I hoped the session would help prepare Texas for big changes to the health insurance market in 2014—changes that are coming whether Texas is prepared or not! For the most part, that didn't happen. The Legislature missed a big opportunity to better protect health insurance consumers by letting our Department of Insurance (TDI) deny rates that are excessive (no, TDI cannot do that today). HB 2782 by Rep. Smithee (Sen. Watson was the Senate sponsor) would have brought TDI oversight of rates for health insurance more in line with its oversight for most other types of insurance consumers buy—TDI can take action on rates for home, auto, title, credit, farm and ranch, mortgage guaranty, long term care, umbrella, Medigap, and more. Health insurance is one of the most expensive and most important products businesses and families buy. But Texas law treats health insurance like an exception when it comes to consumer protection, not the rule. HB 2782 had substantial support in the House, but failed to get a vote in the Senate State Affairs Committee.
At least for the next two years (but hopefully not beyond that), Texas businesses and families will lack the assurance that the premiums they pay for health insurance are fair and justified. This is a particularly bad time to tie the hands of a regulator. Not only is federal money available right now to pay for state-level rate review, but also next year, the Affordable Care Act (ACA) will change the way health insurers set premiums. For example, insurers will no longer be able to charge more to people with pre-existing conditions or charge women more than men. With sweeping market reforms coming in 2014, 2013 was the time to equip TDI with the tools to protect consumers.
Speaking of sweeping market reforms, another thing that didn’t happen this session was to prepare our insurance market and TDI for 2014. TDI lacks clear authority to enforce impending ACA consumer protections, such as no more pre-existing condition exclusions. The Legislature did not ensure that insurers could look to TDI for clarification and consumers could look to TDI for protection when all of the new ACA provisions take effect in 2014. Perhaps the Legislature followed TDI’s lead—a discussion of how to prepare the agency, insurers, and consumers for sweeping market changes was notably missing from TDI’s pre-session recommendations to the Legislature. Texas consumers are now left in the position where the refusal of TDI to be as proactive as possible when it comes to 2014 changes means that we may have to turn to federalregulators to address our concerns, questions, and complaints about insurance products licensed by TDI and sold in the state.
So what did pass? SB 1795 by Sen. Watson will create standards for Navigators in Texas’ federally-facilitated Marketplace and SB 1367 will wind down the Texas Health Insurance Pool (high risk pool) in 2014 when the ACA creates a range of more affordable options in the new Marketplace. Both of these good bills prove that the Texas Legislature has the ability to react to the Affordable Care Act in a manner other than just sticking its head in the sand. But health insurance oversight is yet another area in which our elected representatives missed important opportunities to serve the public.
This piece is cross-posted from the BETTER TEXAS Blog, a blog by the Center for Public Policy Priorities.