October 22, 2014

Health plan review grant will hire consultants

Gene Meyer
Kansas Reporter
TOPEKA — Kansas will spend most of a new $1 million federal grant to clamp down on health plan premiums to hire consultants to measure the problem, according to state insurance regulators’ documents.

The money, which is six times more than the $166,235 the state spends annually to review rising health plan premium costs, is part of $46 million that the U.S. Department of Health and Human Services recently awarded to 45 states and the District of Columbia to develop more-consumer-friendly regulatory systems for curbing escalating premiums.

Application papers that Kansas Insurance Department regulators filed to request the money that federal officials first offered last June, show that state officials plan to spend nearly 70 percent of the money, or $675,000, primarily for information technology and actuarial services consultants to help design the intended new systems, and another 13 percent, or $130,000, to share insurance data with related data banks maintained by the National Association of Insurance Commissioners and the Kansas Health Policy Authority.

The remainder of the money includes $90,000 earmarked for salary and other benefits for one additional full time and one part time employee and for additional equipment, supply and travel expenses, the application papers show.

Regulators believe that ultimately the gathering and management of significantly more actuarial information ultimately will provide health-plan buyers far more information about why their health plan costs are rising and what can be done to control those increases, said Bob Hanson, a Kansas Insurance Department spokesman.

“But right now, the question is ‘what is it possible for us to do?’ “ Hanson said.
A great part of what the department plans to spend money on now, and more later if the current one-year federal allocation is renewed in 12 months, is determining what processes must be put into place to accomodate new health care legislation, he said.

Kansas’ current regulation of health care premium costs is relatively limited. The state follows what’s known in the industry as a file-and-use regulatory philosophy; insurers are allowed to begin charging new rates for health care or other insurance policies as soon as they file the proper paperwork with the department and the new rates remain in effect unless regulators disapprove them afterward.

Health plan companies currently file about 250 sets of rates for new insurance plans in Kansas annually plus about 600 rate changes for existing plans. Once those are filed, regulators typically renegotiate about one third of the total to reduce what they consider unreasonable charges, the department estimates.

Comments

  1. Since my career was in the insurance industry, I have never been able to understand how health insurance carriers and drug companies get by without regulation and oversight. And even more so in the last 15 years where costs have skyrocketed. I have been able to buy drugs from the same drug makers from Canada but the cost is 1/2 of what I would pay here in the U.S. – how is that possible? Because in Canada I presume they have more regulation and oversight than they do here in the U.S. But my computer brain tells me if I can pay $10 for a drug in Canada from a drug maker then that same drug maker shouldn’t be charging me $20 here in the states and all of that bull hockey about their high costs to come up with new and better drugs still doesn’t quite fly with me. It is the good ole file and use – big biz does what they want and in that area they are in a position to pretty much call their own shots and charge whatever they want and the people have to pay the high costs since they need the insurance and the drugs that are so vital to their well being.

    Here in Kansas auto and home insurance rates have been regulated for years – insurance companies have to prove any increases are necessary and the citizens are not being unfairly charged much unlike Missouri who had file and use on those rates for years and perhaps they still do. All during my years in the insurance industry I heard of the tales of the money being exchanged under the table in Missouri so the insurance companies can continue to file and use but hey, here in Kansas perhaps the same entities were paying the bucks under the table to get their increased rates approved – we dear ole taxpaying citizens will probably never know – we just have to continue to pay the exorbinant costs.

    So is this federal money going to be well spent? It all depends on the integrity of the individuals involved. If you put junk into a computer program, you will get junk data being spit out. How will the data be used? As a political tool to get some entities or special interests what they want in order to enrich themselves?

    So those votes you make on your Insurance Commissioner and Governor are pretty important to you. Who will these entities be working for? You, the people, or as we have seen so much, will it be for corrupt corporations, developers and other special interests? I bet my bippy that dear ole Brownback will be working for the Koch people down in Wichita, Blue Cross/Blue Shield, Pfizer and more of the big boys who keep his campaign coffers filled and who he took care of in Washington D.C. but I am sure the Democrats are well taken care by these slimeballs too. Those entities always are contributing to both Democrats and Republicans but, in my opinion, are never really contributing to the American people but only to their own bank accounts. So consequently, I will always want regulation and oversight and many watchdogs out there.

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