The geography of health insurance regulation

Health Affairs

Volumn 19, Issue 2, 2000, Pages 173-184

  Hall, Mark A ^a  

^a WAKE FOREST SCHOOL OF MEDICINE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CLASSIFICATION; ECONOMICS; FINANCIAL MANAGEMENT; HEALTH SERVICES RESEARCH; HUMAN; LEGAL ASPECT; ORGANIZATION; ORGANIZATION AND MANAGEMENT; POLICY; REIMBURSEMENT; SOCIAL CONTROL; UNITED STATES;

COLORADO; EFFICIENCY, ORGANIZATIONAL; FACILITY REGULATION AND CONTROL; FLORIDA; HEALTH SERVICES RESEARCH; HUMANS; INSURANCE, HEALTH, REIMBURSEMENT; IOWA; MARKETING OF HEALTH SERVICES; NEW YORK; NORTH CAROLINA; OHIO; ORGANIZATIONAL OBJECTIVES; ORGANIZATIONAL POLICY; VERMONT;

EID: 0034146108     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.19.2.173     Document Type: Article

References (24)

1. For description and analysis, see E. Wicks and J. Meyer, Small Employer Health Insurance Purchasing Arrangements: Can They Expand Coverage? (Washington: National Coalition on Health Care, May 1999), available online at www.nchc.org/releases/stevesedit.html.
2. This research, its methods, and its other findings are described in more detail on the Web at www.phs.wfubmc.edu/insure. Briefly explained, seven states were selected for in-depth interviews with insurance industry sources about the impact of small-group and individual-market reforms enacted in the early 1990s. Selected states represent a broad range of regulatory and market environments. Interviews were conducted in two rounds, 1997 and 1998, and extensive quantitative data were collected about products, prices, and sales activity. Also, a market-testing study was conducted in which a small employer with three workers contacted eighteen agents in each state to inquire about the purchase of insurance for the group, as well as individual coverage for one worker with serious health problems.
3. M.S. Marquis and S.H. Long, "Recent Trends in Self-Insured Employer Health Plans," Health Affairs (May/June 1999): 161-166.
4. The medical loss ratio is the percentage of premium paid out in claims. Because it can vary quite a lot among groups, insurers, or years, these figures, and those below, reflect rough industry averages over a course of years.
5. The notable exception is the Health Insurance Portability and Accountability Act, but in the individual market it primarily requires insurers only to offer coverage to those leaving group coverage. Even then, it allows diversity among states about how to implement this protection, and it does not regulate rates.
6. The NAIC - a private, nonprofit professional association of state insurance regulators - has proposed a large number of model laws that, while advisory, are often followed and so help to bring some consistency to state regulation.
7. Of the forty-six states with small-group reforms, only seven require pure or nearly pure community rating. Six allow adjustment for age or sex, and thirty-three allow additional adjustments for individual health status or related factors.
8. Note, however, that according to this description, the trust does not self-insure and so does not claim ERISA preemption. This additional technique is available, however, and is used by trusts with sponsors who are not insurers. In such cases, they constitute multiple-employer trusts (METs) or multiple-employer welfare agreements (MEWAs), discussed later.
9. Kentucky Department of Insurance, Market Report on Health Insurance (Frankfort: Kentucky Department of Insurance, April 1997).
10. R. Curtis et al., "Health Insurance Reform in the Small-Group Market," Health Affairs (May/June 1999): 151-160.
11. 111 F.3d 358 (4th Cir. 1997).
12. This is also confirmed by a quantitative study, Marquis and Long, "Recent Trends."
13. There is some confusion in the use of this term between these billing arrangements for individual insurance versus for true group insurance. Under ordinary group insurance, employers sometimes are billed in a way that identifies the unique cost for each employee, based on demographic or health status factors, rather than being billed on a composite basis. The discussion here is not concerned with alternatives to composite billing under group insurance, however. Instead, it addresses the use of list billing as a means to sell individual, rather than group, in-surance in the workplace.
14. In 1997 approximately 500 associations accounted for $6 billion in health insurance premiums and covered four million people. J. Connelly, "A Report on Association Member Health Plans," Association Management (March 1998): 73-90. In 1992 a General Accounting Office survey of state insurance regulators reported 1,034 group-purchasing arrangements classified as MEWAs, serving 2.6 million people. U.S. General Accounting Office, Employee Benefits: ME\VA Regulation, Pub. no. GAO/HRD 92-40 (Washington: GAO, March 1992). Long and Marquis found in a 1997 nationwide employer survey that 26 percent of all employers, and 33 percent of employers with ten or fewer workers, use some type of pooled purchasing arrangement. S.H. Long and M.S. Marquis, "Pooled Purchasing: Who Are the Players?"Health Affairs (July/Aug 1999): 105-111.
15. In 1997 approximately 500 associations accounted for $6 billion in health insurance premiums and covered four million people. J. Connelly, "A Report on Association Member Health Plans," Association Management (March 1998): 73-90. In 1992 a General Accounting Office survey of state insurance regulators reported 1,034 group-purchasing arrangements classified as MEWAs, serving 2.6 million people. U.S. General Accounting Office, Employee Benefits: ME\VA Regulation, Pub. no. GAO/HRD 92-40 (Washington: GAO, March 1992). Long and Marquis found in a 1997 nationwide employer survey that 26 percent of all employers, and 33 percent of employers with ten or fewer workers, use some type of pooled purchasing arrangement. S.H. Long and M.S. Marquis, "Pooled Purchasing: Who Are the Players?"Health Affairs (July/Aug 1999): 105-111.
16. In 1997 approximately 500 associations accounted for $6 billion in health insurance premiums and covered four million people. J. Connelly, "A Report on Association Member Health Plans," Association Management (March 1998): 73-90. In 1992 a General Accounting Office survey of state insurance regulators reported 1,034 group-purchasing arrangements classified as MEWAs, serving 2.6 million people. U.S. General Accounting Office, Employee Benefits: ME\VA Regulation, Pub. no. GAO/HRD 92-40 (Washington: GAO, March 1992). Long and Marquis found in a 1997 nationwide employer survey that 26 percent of all employers, and 33 percent of employers with ten or fewer workers, use some type of pooled purchasing arrangement. S.H. Long and M.S. Marquis, "Pooled Purchasing: Who Are the Players?"Health Affairs (July/Aug 1999): 105-111.
17. Also significant are large employer purchasing groups that negotiate discounts and monitor plan performance. See H.H. Schauffler and T. Rodriguez, "Exercising Purchasing Power for Preventive Care," Health Affairs (Spring 1996): 73-85. However, these structures do not alter regulatory boundaries and so are not included in this discussion.
18. See K. Polzer and J. Jones, "Multiple Employer Purchasing Groups (METs, MEWAs, HINs. HIPCs): The Challenge of Nieshing ERISA Standards with Health Insurance Reform," Issue Brief no. 604 (Washington: National Health Policy Forum, September 1992); K. Polzer, "Preempting State Authority to Regulate Association Plans: Where Might It Take Us?" Issue Brief no. 707 (Washington: National Health Policy Forum, October 1997); A. Martin et al., "MEWAs: An Exception to ERISA Preemption: Why, What, and When" (Washington: American Law Institute-American Bar Association, February 1992); and C. Forrelli, R.Jones, and C. McHugh, "Regulation of Multiple Employer Welfare Arrangements: The Dilemma of Dual Federal/State Regulation," FICC Quarterly (Fall 1995): 45-63.
19. See K. Polzer and J. Jones, "Multiple Employer Purchasing Groups (METs, MEWAs, HINs. HIPCs): The Challenge of Nieshing ERISA Standards with Health Insurance Reform," Issue Brief no. 604 (Washington: National Health Policy Forum, September 1992); K. Polzer, "Preempting State Authority to Regulate Association Plans: Where Might It Take Us?" Issue Brief no. 707 (Washington: National Health Policy Forum, October 1997); A. Martin et al., "MEWAs: An Exception to ERISA Preemption: Why, What, and When" (Washington: American Law Institute-American Bar Association, February 1992); and C. Forrelli, R.Jones, and C. McHugh, "Regulation of Multiple Employer Welfare Arrangements: The Dilemma of Dual Federal/State Regulation," FICC Quarterly (Fall 1995): 45-63.
20. See K. Polzer and J. Jones, "Multiple Employer Purchasing Groups (METs, MEWAs, HINs. HIPCs): The Challenge of Nieshing ERISA Standards with Health Insurance Reform," Issue Brief no. 604 (Washington: National Health Policy Forum, September 1992); K. Polzer, "Preempting State Authority to Regulate Association Plans: Where Might It Take Us?" Issue Brief no. 707 (Washington: National Health Policy Forum, October 1997); A. Martin et al., "MEWAs: An Exception to ERISA Preemption: Why, What, and When" (Washington: American Law Institute-American Bar Association, February 1992); and C. Forrelli, R.Jones, and C. McHugh, "Regulation of Multiple Employer Welfare Arrangements: The Dilemma of Dual Federal/State Regulation," FICC Quarterly (Fall 1995): 45-63.
21. See K. Polzer and J. Jones, "Multiple Employer Purchasing Groups (METs, MEWAs, HINs. HIPCs): The Challenge of Nieshing ERISA Standards with Health Insurance Reform," Issue Brief no. 604 (Washington: National Health Policy Forum, September 1992); K. Polzer, "Preempting State Authority to Regulate Association Plans: Where Might It Take Us?" Issue Brief no. 707 (Washington: National Health Policy Forum, October 1997); A. Martin et al., "MEWAs: An Exception to ERISA Preemption: Why, What, and When" (Washington: American Law Institute-American Bar Association, February 1992); and C. Forrelli, R.Jones, and C. McHugh, "Regulation of Multiple Employer Welfare Arrangements: The Dilemma of Dual Federal/State Regulation," FICC Quarterly (Fall 1995): 45-63.
22. See R. Tillman, Broken Promises: Fraud by Small Business Health Insurers (Boston: Northeastern University Press, 1998); F. Damon, "Multiple Employer Trusts: A Historical Perspective from ERISA to the California Approach,"Journal of Insurance Regulation 2 (1983): 20-29; and GAO, Employee Benefits: MEWA Regulation.
23. See R. Tillman, Broken Promises: Fraud by Small Business Health Insurers (Boston: Northeastern University Press, 1998); F. Damon, "Multiple Employer Trusts: A Historical Perspective from ERISA to the California Approach,"Journal of Insurance Regulation 2 (1983): 20-29; and GAO, Employee Benefits: MEWA Regulation.
24. See R. Tillman, Broken Promises: Fraud by Small Business Health Insurers (Boston: Northeastern University Press, 1998); F. Damon, "Multiple Employer Trusts: A Historical Perspective from ERISA to the California Approach,"Journal of Insurance Regulation 2 (1983): 20-29; and GAO, Employee Benefits: MEWA Regulation.