HCR: Waivers for McDonald's, Concentration, and the "UnitedHealthCare Full Employment Act"

[amborin]

Insurer Cuts Health Plans as New Law Takes Hold


The Principal Financial Group announced on Thursday that it planned to stop selling health insurance, another sign of upheaval emerging among insurers as the new federal health law starts to take effect. .............What you’re seeing is the beginning of some serious math and some posturing,” said Len Nichols, a health economist and policy expert at George Mason University. While some insurers, like Principal, are choosing to leave the business rather than make the necessary investments to stay, others may be simply trying to delay some of the new rules or overturn them, he said.
.......McDonald’s recently asked federal officials for an exemption to rules that would ban the kind of health plans many of its restaurant workers have, because the existing policies sharply limit coverage.....
.........In the case of McDonald’s, federal health officials told the insurer responsible for providing these plans that it would not be affected by new rules prohibiting annual limits on coverage. The new waiver will allow McDonald’s and other companies to continue offering such plans, which cap benefits, to their workers.
.....The administration has already issued dozens of such waivers, as insurers and companies try to influence proposals for regulations to put the law in place.....

snip

Other aspects of the health care regulations are worrying some state insurance commissioners, who fear that insurers are going to stop selling policies in some areas of coverage. For example, in the case of child-only policies, the new rules require insurers to offer coverage to even those children who are seriously ill, leading some insurers to balk at the idea that they will be forced to cover too many sick children. Aetna, Cigna and WellPoint, among others, have said they will stop selling new policies in some states.
“Disruption in our marketplaces is a concern for insurance commissioners,” said Jane L. Cline, the president of the National Association of Insurance Commissioners, who is also a West Virginia regulator.
In the case of Principal Financial, UnitedHealth Group’s insurance plans have agreed to offer coverage to Principal’s customers. “They are clearly going to be a long-term player in this market,” Mr. Houston said.

More insurers are likely to follow Principal’s lead, especially as they try to meet the new rules that require plans to spend at least 80 cents of every dollar they collect in premiums on the welfare of their customers. Many of the big insurers have been lobbying federal officials to forestall or drastically alter those rules.
“It’s just going to drive the little guys out,” said Robert Laszewski, a health policy consultant in Alexandria, Va. Smaller players like Principal in states like Iowa, Missouri and elsewhere will not be able to compete because they do not have the resources and economies of scale of players like UnitedHealth, which is among the nation’s largest health insurers.
Mr. Laszewski is worried that the ensuing concentration is likely to lead to higher prices because large players will no longer face the competition from the smaller plans. “It’s just the UnitedHealthcare full employment act,” he said.


http://www.nytimes.com/2010/10/01/health/policy/01insure.html?_r=1&ref=business