State Health Insurance Consumer Advocate in Pennsylvania

Health insurance companies of course are regulated. Every State has an Office of or Department of Insurance. This agency monitors health insurance companies for quality, provides ratings, and other information for the public. A States office of insurance also approves mergers of health insurance companies, and licenses a given company to do health insurance business within the state.

However such agencies have little or no authority to regulate the prices that health insurance companies charge. Several democratic state representatives in Pennsylvania have proposed a bill that will create a consumer advocacy organization that would oversee pricing in the health insurance market. While the proposed agency will not have the authority to set prices for health insurance premiums, health insurance companies in the state would have to request an increase in rates though the agency, and provide justification for health insurance rate increases.

The Pennsylvania Public Interest Research Group one of several non-profit consumer organizations in support of the measure says that individual health insurance consumers have very little bargaining power in negotiating prices for health insurance. Certainly not near the bargaining power of those enrolled in group health insurance plans. Such an advocacy group can give these individual purchasers of private health insurance in the State of Pennsylvania more of a voice. Similar legislation has been proposed and passed by the State House in the past, but it has never received Senate approval. There exists in the State a Consumers Advocacy Office that tries to maintain electric, water, and other utilities at an affordable level for consumers. The proposers of the bill want a similar office strictly to do the same for affordable health insurance.

Health Insurance companies operating in the state fail to see the need for another health insurance regulatory body. Blue Cross of North Eastern Pennsylvania, whose recent rate increase despite record surpluses spurred the proposed Bill, said that surpluses are used to keep the company solvent and to bank to pay off future claims. Rate increases are needed to keep up with rising healthcare costs. However Blue Cross officials have said they support the health insurance proposal in spirit, they just feel that the Department of Insurance already does oversee pricing, and they do not see the need for a new agency that could create more bureaucratic bottlenecks.