Michael Hiltzik: Pulling the teeth from healthcare reform
The Patient Protection and Affordable Care Act -- the federal healthcare reform, to you -- is so long and inclusive that what's hardest to communicate about it is what's in it. When I started asking healthcare reform experts about the provision allowing insurance companies to be exiled from insurance exchanges if they're found to be overcharging, several said it was news to them.
It's not. Starting now, state and federal regulators are supposed to keep an eye on premium hikes. As my Wednesday column reports, companies with a pattern of unreasonable increases can be shut out of the exchanges, meaning they won't be allowed to sell individual or small-group policies after 2014. (The provision is on Page 28 of the act, linked to above.)
But will regulators really impose the nuclear option on a misbehaving insurer, especially a big one? Only if the public holds their feet to the fire. Otherwise insurance companies may escape effective regulation, just as big banks do. And we know how bad things can get when big banks are allowed to do what they want -- just see what happened to the U.S. economy in 2008.
The column starts below.
Big, powerful industries facing tougher government oversight — the health insurance industry, say — know that the legislative battle in Congress or state capitals is just the first skirmish.
The more important fight is over the regulations that implement legislative policies. That's the point where laws with teeth in them are taken to the dentist to get them pulled.
That process is already happening in relation to the new federal healthcare law. Forget the fatuous play-acting over "repeal" by the Republican majority in the House of Representatives. The real action is behind the scenes.
Consider what's been happening with a provision in the new law designed to keep health insurers from unreasonably running up premiums before 2014, when they'll come more fully under federal oversight.
Read the whole column.
-- Michael Hiltzik