Oh, The Horror: Having Too Many Agencies To Protect You From Insurance Company Abuse

Today, HCAN had a conference call to push for a federal regulator structure in health care reform with a national exchange. The idea is that only the federal government has the power, resources, and desire to enforce the new insurance regulations. The Senate bill leaves enforcement up to state insurance commissioners, which, for the most part, have been a failure due to insufficient funding and often cozy relationships with the companies they are supposed to regulate.

The idea that we are even considering creating another federal-state partnership with state control of the implementation to deal with the uninsured seems like an act insanity. We have tried this before: It’s called Medicaid, and it has turned into a patchwork disaster. It works well in some states, but completely fails as a safety net in many others—notably, red states, like Texas.

Not surprisingly, the insurance companies strongly favor the Senate bill, which would leave enforcement up to the states. Although the case for leaving enforcement solely up to state insurance commissioners is practically laughable.

The Blue Cross and Blue Shield Association released a memo today arguing that letting the federal government regulate the plans would "result in a takeover of state regulation," would create "conflicting rules" and would add "unnecessary costs to the system by establishing a new federal bureaucracy." Consumers, the group says, wouldn't know whether to turn to state or federal regulators if they needed help.

Oh, the horror! You mean if a sick person got screwed over by their insurance company, they might have two whole agencies to potentially ask for help in fighting against a large and powerful corporation? Won't the health insurance lobby please protect consumers from the nightmare of having too many agencies protect them from insurance abuse? Clearly, we would all be better off if our lives were simplified by only being able to seek recourse from an underfunded, understaffed, and overly industry friendly state insurance commissioner's office.

The health insurance industry’s defense of going with state-based exchanges and state-based regulator enforcement is frankly pathetic. There is really no good reason not to go with the House's system of national regulation and a national exchange, with a state opt-out provision for states who want an even tougher regulator system. Leaving regulator enforcement up to the states is just a massively lucrative giveaway to the insurance industry. The really sad thing, though, is that, even on this point, the insurance industry may win. There are enough senators friendly to the health insurance industry that, even with these weak arguments, they could likely carry the day.