As health care reform moves forward, one of the most important functions the federal government will fulfill is that of watch dog. In a way, you really can’t blame insurers. They are in business. But in an effort to counterbalance the provisions of the new federal laws that cut into their profits, the companies are apt to engage in price excesses that will be harmful to consumers.
Health and Human Services Secretary Kathleen Sebelius has announced that forty-five states and the District of Columbia will each receive $1 million in federal funds for insurance premium monitoring. The idea is to watch out for unreasonable increases and to take action against them swiftly.
Over the past ten years insurance premiums have doubled, shooting skyward well ahead of the wage levels and the pace of inflation. That situation has priced health insurance well beyond reach for millions of Americans and is the very situation federal reform is seeking to correct.
Currently, twenty-six states and the District of Columbia have the legal authority to reject proposed premium hikes they deem excessive, but in many cases, they lack the funds to enforce the decision. Under the terms of the Affordable Care Act, some $250 million in Health Insurance Premium Review Grants are available over the next five years.
Ultimately the goal of the reform is better competition in the industry, lower overhead for insurance companies, and risk pooling in insurance exchanges. By 2014, experts expects premiums to fall by 14-20%. In the meantime, however, the appropriate government role is one of vigilance.