Pennsylvania House Passes Bill Limiting Insurers Ability To Base Rates On Health History For Individual, Small-Business Plans

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 04 Apr 2008 - 8:00 PDT

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The Pennsylvania House on Tuesday voted 131-72 to approve legislation (HB 2005) that would limit the ability of insurers to consider certain factors, such as health history, when setting rates for health plans offered to individuals and small businesses, the Pittsburg Post-Gazette reports. The measure would allow insurers to set rates based on age and geographic region.

The bill also would require insurers to spend 85% of premiums on health care. Insurers violating the rule could be required to issue rebates to policyholders. In addition, the legislation would allow the Pennsylvania Department of Insurance to disapprove requests for rate increases if an insurer has not operated efficiently or has not controlled costs for avoidable hospital-acquired infections or chronic disease management.

The provisions of the bill are similar to those included in Gov. Ed Rendell's (D) Prescription for Pennsylvania plan to reduce health care costs and improve quality, the Post-Gazette reports. Rendell spokesperson Chuck Ardo said, "The governor is certainly pleased that progress is being made and is hopeful legislators will see the urgency of working on the rest of the plan."

The House on Tuesday also approved legislation (HB 2098) that would allow insurers to not pay hospitals for preventable medical errors that result in death or serious disability (Fahy, Pittsburgh Post-Gazette, 4/2).

Opinion Piece
Pennsylvania lawmakers are considering proposals that would "provide health insurance for all by 'aggregation,' or patching together" existing state and federal programs and employment-based insurance with "new state pools and/or subsidies," Theodore Marmor, a professor emeritus at the Yale School of Management, and Jerry Mashaw, a professor at Yale Law School, write in a Philadelphia Inquirer opinion piece.

They continue that while the "patchwork approach has obvious limitations ... it avoids the massive political obstacles to a complete overhaul of existing health insurance arrangements," and Rendell's "particular approach has much to like," as it is "more serious about cost control and unified coverage than the Massachusetts program, or the proposals of the presidential hopefuls," they write. The Pennsylvania House has approved "a similar, though less ambitious, version" of Rendell's plan, according to Marmor and Mashaw.

Rendell's plan "mixes his administration's thoughtful reform with fashionable platitudes," such as the idea that expanded coverage of preventive medicine and wellness programs will generate savings, but while these "may be admirable, ... no industrial democracy has constrained the costs of universal health insurance through such devices," the piece states. It concludes, "Such appeals represent the persistent pursuit of panaceas," and "[s]etting panaceas aside would make Pennsylvania's reform approach more convincing" (Marmor/Mashaw, Philadelphia Inquirer, 3/31).

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