Governor Rendell Addresses Health Insurance Reform

Says Efforts to Protect Pennsylvanians More Urgent and More Critical

HARRISBURG, Pa., March 22 /PRNewswire-USNewswire/ -- On the heels of the sweeping national legislation passed last night to reform the nation's health care system, Governor Edward G. Rendell today expressed his concern and disappointment about a lawsuit filed last week attempting to block the state Insurance Department from doing its job to ensure free and fair competition in Pennsylvania's health insurance marketplace.

"The new federal health care package is dependent on a vibrant and competitive private health care insurance system, and today, our Insurance Department is preparing to go to Commonwealth Court to ensure free and fair competition in our insurance marketplace," Governor Rendell said. "One of the largest health insurance companies in our state, Highmark, seeks to tie the regulatory hands of our Insurance Commissioner and prevent him from doing one of his most important jobs. That's unacceptable.

"Pennsylvania is widely known as one of the least competitive states because of the dominance of the Blues in the health insurance market. As a result, there is less price competition and our health insurance consumers suffer higher costs and have fewer choices."

The Governor said that the court's decision on the Highmark case would have far-reaching implications for consumers in this state beyond those who are served by Highmark. He said that is why he is fighting to protect the rights of all health care consumers in Pennsylvania.

The case will be jointly defended by the Rendell administration and the Pennsylvania Office of the Attorney General.

Last year, the Insurance Department kicked off an examination of the state's four Blue Cross/Blue Shield plans to see if there are any market practices that could be unfairly inhibiting competition. The Insurance Department is nearly finished with the examination of Capital BlueCross' market practices and it expects to soon shift its focus to complete the examination process of Highmark's market practices.  

While it is not uncommon for insurance companies to dispute findings from insurance examination, companies typically do so at the conclusion of a fact-gathering process. This case is different, the Governor said.

Highmark, which has not provided any information to the Insurance Department's 2009 data request, has sued to prevent any further exam activity. It has even gone a step further to block the release of the results of a similar examination of its competitor – Capital BlueCross.

"I am disappointed – but not surprised - that Highmark has chosen to fight our efforts to ensure the protection of consumers and guarantee a free and fair marketplace. Health insurance is big business. Historically, it has operated -- and especially here in Pennsylvania -- with limited regulation and weak oversight. Now, as we enter a new phase where every American will be insured, these big businesses that are guaranteed customers, are going to have guarantee they will operate in a manner that is respectful of their customers as well as their competitors."

The Governor also urged the state Senate Insurance Committee to pass small group health insurance reform. Over the past few years, the House has passed two versions of reform that would end insurance rate spikes that impact small employers and give the Insurance Department the ability to review small group health insurance rate increases like it does for other types of insurance. The legislation is House Bill 746, passed June 29, 2009; and House Bill 2005, which passed April 1, 2008. Small group health reforms were part of the Governor's Prescription for Pennsylvania health care reform proposal.

"Until the new federal reforms take effect in 2014, our consumers and business could suffer the absence of responsible insurance regulation. Pennsylvania is often called the 'Wild West' when it comes to health insurance – very few rules are in place and, as a result, the guys with the biggest guns rule.

"We need laws in this state that put reasonable rules in place, and I urge the Senate to send these bills to my desk for signature."

SOURCE Pennsylvania Office of the Governor