Citizen Power releases major study on the impact of Affordable Care Act on health insurance landscape in Pennsylvania

PITTSBURGH, Sept. 25, 2013 /PRNewswire-USNewswire/ -- Citizen Power, a nonprofit public policy advocacy organization has released an extensive White Paper on health insurance regulation in Pennsylvania. The paper includes information that legislators, regulators, health care policy advocates and journalists will find very valuable, including recommendations for improving how the Pennsylvania Insurance Department (PID) operates. In addition, the paper has a detailed section on the potential impact of the Patient Protection and Affordable Care Act (PPACA) (commonly referred to as 'Obamacare') on health insurance regulation in Pennsylvania.

The White Paper is entitled "Pennsylvania's New Health Insurance Landscape: PPACA and its Impact on Regulation" and was funded by a grant from The Pittsburgh Foundation. A complimentary copy has been sent to members of the insurance oversight committees of the Pennsylvania General Assembly, and an electronic version is available at citizenpower.com.

The paper is the result of Citizen Power's concern about rising insurance premiums. "I kept watching year after year as insurance premiums increased faster than inflation and no one seemed to be doing anything about it," said David Hughes, Citizen Power founder and president. "When I asked why this was happening, no one could give me an answer. This White Paper is an attempt to provide answers to how this crazy health insurance system works and how it can be fixed," Hughes said.

"This work represents nearly three years of research," said Dr. Titus North, the lead author of the paper. "We wanted to provide a 'one stop' resource that will answer a number of questions, including how the Pennsylvania Insurance Department operates and how PPACA will work here."

Dr. North's research provides a detailed description of how the private health insurance companies are owned by the same Wall Street investors that own the largest hedge funds and corporations.  "This explains why the mission of these huge health insurance companies is to maximize profits at the expense of consumers," said Dr. North. "Once you know who owns these health insurers it explains much of the reason why long standing problems go unaddressed."

Citizen Power also provides details not found elsewhere about how the PID performs its rate making responsibilities. As the White Paper shows, from January 2008 through April 2010, 3548 rate increase requests were approved, virtually none were rejected.  "While it cannot be said that the PID is in the pocket of insurance companies, it rarely rejects a rate increase request," said Ted Robinson, Citizen Power staff attorney. "The PID is limited by state and federal statutes in terms of how much it can do. We recommend expanding the PID's authority to give it the tools to rein in unjustified rate increases," continued Robinson.

Among several recommendations, Citizen Power suggests making the PID more like the Public Utility Commission, where the rate making process is more transparent and provides an opportunity for consumer participation. In addition, Citizen Power recommends establishing a new section in the Pennsylvania Office of Consumer Advocate (OCA) for health insurance. This way, health insurance policy holders' interests will be represented in rate making proceedings before the PID.

Citizen Power also examined the potential impact of PPACA on insurance regulation in Pennsylvania. The nonprofit's research shows that PPACA will add significantly to the workload of the PID. "It is open to question whether the PID can handle the additional responsibilities," noted Dr. North.  "PPACA has some potentially good aspects, including banning pre-existing condition exclusions and rescissions (the practice of retroactively terminating coverage when a policy holder gets sick). However, there are many loopholes in the law, and the PID will have to be diligent in ensuring that insurers comply with these provisions," North said.

Dr. North goes on to point out that PPACA has some major flaws. "The Act fails to address the fundamental problem of rising health care costs. In fact, it may exacerbate this problem with massive subsidies to help low income consumers purchase private insurance and pay inflated medical bills. This is unsustainable, and the failure to address ever increasing health care costs will have major consequences for the US economy," North concluded.

PPACA is set to be implemented in January 2014. On October 1, 2013 the insurance Exchanges or markets will open for business letting consumers purchase policies from approved plans. The Exchange in Pennsylvania will be run by the federal government but insurance plans will be regulated by the PID.

"The provision of health care in the US is in need of transformative change and PPACA is not the answer," said David Hughes. "It's time for the US to do what all other advanced economies have done and that is to institute an efficient health care financing system. We are convinced that the only solution is to improve and expand Medicare to all US residents. Studies show that this will not only make sure everyone will get needed care, but it will save serious money," Hughes concluded.

SOURCE Citizen Power