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The Federal Government Begins Collecting Information on Health Insurance Rate Increases, Information

Missouri is one of only two states that doesn’t track health insurance rates. But under the federal healthcare law, health insurance companies now have to tell the federal government about rate increases. Thomas McAuliffe is a policy analyst with the Missouri Foundation for Health.

“Here’s a case in which the federal government will know about our insurance prices than we do. It’s because we have not traditionally tracked those as a state, the Department of Insurance hasn’t tracked them. It’s just something Missouri hasn’t done. It may be an issue of the free market or weaker oversight, but in this case, we don’t much about how much insurance rates go up in our state.”

McAuliffe says state legislators would have to give the Missouri Department of Insurance legal authority to begin tracking this information. But there’s perhaps a bigger issue on the horizon. If the federal healthcare law withstands court challenges and remains in place, each state eventually will have to set up a governmental agency to monitor insurance rate increases.

“The federal law requires that our state set up some health rate authority. This is under the thought that by getting an authority to review those rate increases, the insurance companies will have to justify them. I warn people that this does not mean those increases will be moderated.”

Even if a rate authority has limited power, McAuliffe says employers, and the public, can use the increased access to information.

“There is the power of public opinion. That’s one of the things that I think that this reporting to the federal government is where the power is. If the federal government and/or the Department of Insurance decides to publicize that X Insurance Company is going to go up by 33% or 23%, there might be some sort of backlash, and the public opinion may be more powerful than the actual regulatory authority.”

And while more information is available now about health insurance rate increases, McAuliffe acknowledges there’s not a lot the public can do about it…at least not for a couple of years.

“To be truthful, until 2014, not a lot changes. The customer may be kind of empowered by information, and as we know from hospital systems and healthcare generally, information doesn’t always equal two better prices, or better care per se. Why do I say 2014? Well, that’s when, presumably, the state will have its health insurance exchange up and running. These health insurance exchanges are like Geico or Travelocity for insurance. People will be able to go to the Internet or call a 1-800 number. They’ll be able to draw up a number of insurance plans, compare them on price and options, and then purchase insurance right there on the Internet.”

A state senate interim committee is studying the issue of a healthcare exchange in Missouri, a concept that’s drawn sharp criticism from some Republican lawmakers. In the meantime, the US Supreme Court is expected to rule on the constitutionality of key aspects of the federal healthcare law in its 2011-2012 term.