Tuesday, September 14, 2010
Health Insurance, Free Speech, Regulation of Advertising and HHS Secretary Sebelius' Threats: The Story Behind the Story
The DMCB checked out page 21 of the ACA that grants the Secretary the authority for an annual "review" of "unreasonable" rate increases. "Review" and "unreasonable" are undefined but here's the abundantly clear statutory basis for Ms. Sebelius' threat:
[The Secretary will] make recommendations, as appropriate, to the State Exchange[s] about whether particular health insurance issuers should be excluded from participation in the Exchange [s] based on a pattern or practice of excessive or unjustified premium increases.
The DMCB's read of the Act reveals that there is no language that grants the HHS Secretary the authority to bar insurer participation in an exchange on the basis communicating to customers in a manner that is contrary to the Department's expectations.
Yet, the DMCB suspects smart commercial insurers won't be surprised by this apparent trampling of their organizations' free speech rights. To find out why, check out Ms. Sebelius' old home State of Kansas Insurance Department web site and you'll see typical regulatory language that prohibits insurers from distributing any marketing or other materials that "misleads." This reasonable prohibition is designed to protect consumers from false advertising. As a result, commercial insurers, knowing that their marketing is closely monitored, have been careful to not deviate from using the exact information contained in their highly regulated policies. Ever wonder why your insurance correspondence is in 3 point font legalese? Now you know.
Ms. Sebelius is a former state insurance commissioner who is undoubtedly bureaucratically conditioned to the need for close surveillance of all advertising, marketing, correspondence or communication. Commercial insurance companies should be quite used to this, so the DMCB is surprised to read that some unnamed companies would even think about blaming the Feds.
Even more surprising was the response of the DC-based health insurer trade association. AHIP President and CEO Karen Ignagni pushed back with this statement:
b) AHIP's testy public response reflects an emboldened industry that now thinks the ACA may be vulnerable. Even worse, it is no longer afraid of the Administration.
The DMCB expects more of this dysfunction in the future. It makes for great blogging, but unfortunately, the American people deserve better.