Biden Backs Commissioners' Role in Health Reform, Cites White House Report on Premiums

Vice President Joe Biden told state insurance commissioners they will continue to play a critical role in consumer protection and industry oversight under any national health care reform legislation.

In remarks at the National Association of Insurance Commissioners' fall national meeting, Biden also referenced a new White House report showing a state-by-state rise in health insurance premiums of 90%-150% over the past decade, far eclipsing increases in wages and inflation. Biden cited the examples of Alaska, where premiums rose 145% while wages grew 35%, and Michigan, where a 37% gap between premiums and wages was the smallest among the states. In the past year, premiums increased 5.5% while inflation fell 0.7%, according to the report.

"All around the country we see these gaps widening," Biden said in what the White House said was his first major policy address on health care.

"I want insurance companies to make money ... but I also want them held accountable," Biden said. "I want to restore stability to our health care system."

Insurance regulators "do what you can, but too often you don't have the authority, you run into legal limits, you're up against major consolidation of insurance markets in your state," he said.

Biden reiterated core reform principles endorsed by the White House, including: an end to denials for pre-existing conditions, a ban on annual or lifetime coverage limits and restrictions on the size of out-of-pocket deductibles or co-payments.

State commissioners know the problems of the current health care system better than anyone and thus have an important role to play in reform, Biden said.

"You're the best equipped to educate consumers. You are the best equipped to field complaints. You're the best to serve as a critical line of defense against abuse and fraud that has crushed families, crushed businesses and crushed the dreams of millions of Americans ? and you'll remain so." Biden said.

NAIC leaders embraced the vice president's comments, which were in line with reform principles adopted by Democrats and Republicans in the association. In a new letter to members of Congress, they called for core reforms that keep the states' regulatory role in overseeing consumer protections and other components of health insurance regulation.

NAIC President-elect and West Virginia Insurance Commissioner Jane Cline said, "He recognized that we are on the front lines, and we do see these situations on a daily basis."

While the NAIC has not formally endorsed any single bill, leaders welcomed the organization's proposed role in legislation now being hashed out in the Senate Finance Committee.

Sponsored by Senate Finance Committee Chairman Max Baucus, D-Mont., the bill would give the NAIC one year to formulate a model regulation consistent with new federal health insurance rating, issuance and marketing requirements. A new NAIC model would automatically become the new federal minimum standard. If the NAIC does not act, the Secretary of Health and Human Services would promulgate regulations (BestWire, Sept. 17, 2009).

The Baucus bill would also give the NAIC until 2013 to establish rules for the creation of new "health care choice compacts" to allow insurance companies to sell health insurance products across state lines. Consumers' domiciles would retain certain consumer protection and market conduct oversight; insurers would have to either licensed in all participating states or otherwise submit to the jurisdiction of each state. The NAIC would also be involved in developing standards for implementing national health insurance plans that could be offered across state lines (BestWire, Sept. 17, 2009).

Kansas Insurance Commissioner Sandy Praeger, a Republican and chairwoman of the NAIC's Health Insurance and Managed Care Committee, has personally endorsed the Baucus bill.

(Corrects the rate of inflation at the end of the second paragraph.)