Problem: Insurance costs are still going up, not down.
Solution: We all know that the Affordable Care Act—also known as Obamacare or the ACA—has benefitted millions of Americans who didn’t have access to health insurance and did a lot to end insurance companies’ discriminatory and unfair practices. But we also know that a major initiative like the Affordable Care Act needs to be constantly reviewed and revised to improve its details. That’s what I’ll be exploring for the next few weeks in the Shepherd’s new series, Beyond Obamacare.
One of those areas ripe for improvement is cost containment. The ACA is bringing down health care costs because more people have insurance coverage and the law itself makes excessive insurance profits illegal. But entrenched health insurers and providers are still pushing for higher rates. This is where a policy known as “rate review”—where insurance companies must justify their proposed rate increases in public—could help keep health care affordable. For more than 100 years we’ve held utility companies to this standard when they want to raise their rates for electricity or gas, because we as a society have come to agree that consumers shouldn’t be the victims of price gouging for a service necessary for their health and welfare. Why is health insurance different?
Herein lies a big problem with modern health care: The true costs are too often kept hidden. Hospitals don’t publicly disclose what they charge various insurers for the same procedure. And insurance companies don’t explain why they feel they must hike their rates, so it’s difficult to find out if their reasons are valid or not.
Many states, including Minnesota, require companies through rate review to explain publicly why they want to charge their customers more. But Wisconsin Gov. Scott Walker’s appointed insurance commissioner, Ted Nickel, has the power right now through robust rate reviews to call out excessive insurance rate increases and even deny bad actors access to the marketplace. But Walker and Nickel are not doing this, nor do they have to. And Wisconsinites are forced to pay higher insurance costs than Minnesotans, a result partially due to Wisconsin’s lax rate reviews.
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Six companies have proposed large rate increases for thousands of Wisconsin consumers next year. If we don’t seek out the real root causes and demand more bang for our buck then we are trusting insurance companies at their word that they have our best interests in mind.
Scrutinizing insurance company rate increases, known as rate review, can make health care more transparent and affordable. But only if we use it.
Kevin Kane is the lead organizer at Citizen Action of Wisconsin and is one of the state’s noted experts on health care reform. The Shepherd ran his series Understanding Obamacare when the ACA was being implemented. The Shepherd and Citizen Action of Wisconsin will answer your questions about Obamacare during the next few weeks. Email your questions to editor@shepex.com.
