GOP Lawmakers Quiz Insurance Commissioner On Federal Grant

An overlooked component of federal health care reform — closer monitoring of insurance rate changes — received a lot of scrutiny in a routine legislative committee hearing on Thursday.

Republican legislators on the Joint Peer Review Committee quizzed Insurance Commissioner Jay Bradford for more than a half hour about his request for a sign-off on a $3.8 million federal grant to enhance the agency’s review of health insurance rates.

The money would be used to advance efforts already underway to improve the regulatory agency’s ability to collect, automate and make more transparent to the public rate increase requests by health insurance companies.

Last year, the cost of health insurance plans nationally increased about 9%, according to the Kaiser Foundation.

Bradford said while the money is being provided by the new federal health care reform law, its intended consequence — protecting and educating consumers on health insurance increases — would remain intact even if the federal law is overturned.

“It’s going to make it a much improved process to protect consumers once we get this in place,” Bradford said.

Currently, the Insurance Commissioner has a high degree of autonomy in overseeing rate increases. If a company is denied an increase, it can appeal through a commission hearing process and eventually through court action, Bradford explained.

He said the bulk of the $3.8 million in the new grant would help automate some processes to review insurance rates and the factors that drive their changes. Bradford said the money will also give the Insurance Commission a capacity it has never had and could reduce its dependence on using outside actuaries, which cost the agency hundreds of thousands of dollars annually.

“It will have a cleansing effect to the process in my opinion,” he said.

A breakout of the $3.8 million grant provided by the Insurance Department shows that $1.8 million would be spent in Year 1. That first year money would be spent as follows:

Data Review – $674,558
Data – $688,780
Outreach – $415,692
Legal – $95,068

Sen. Cecile Bledsoe (R-Rogers) was the first to quiz Insurance Department representatives on the grant’s use. After the meeting she expressed more concerns about the rate review grant, its expenditures, and the potential for federal health care to be overturned.

“Why are we doing this now? Why can’t we wait?,” Bledsoe said. “To me, it seems like if its going to be repealed, parts of the Patient Protection and Affordable Care Act will have inroads into the health care system that we might not ever be able to get out. In this case, that might be good.”

Other legislators who raised questions regarding the grant included Reps. Jane English (R-North Little Rock), Nate Bell (R-Mena), Mark Biviano (R-Searcy), John Burris (R-Harrison) and Kim Hammer (R-Benton).  The Arkansas Legislative Council is expected to review the grant at its Dec. 16th monthly meeting.