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Lawmakers in most states have little control over healthcare premiums

Only 19 states have 'prior approval' authority over insurance rates. A review of campaign donations shows insurers funneling money to key lawmakers and squelching efforts to expand oversight of premiums.

August 12, 2010|By Noam N. Levey, Los Angeles Times

The last attempt died in 2007 when it was blocked by four members of the Senate Health Committee. The four received more money from the state's largest health insurers and their trade associations than any other state senators in the preceding six years, according to an analysis by California-based Consumer Watchdog.

Illinois insurers maintain such a strong grip on the statehouse that consumer advocates there can't remember the last serious attempt to give the state insurance commissioner authority to check what insurance companies charge.

In the 2008 election cycle, the then-chairman of the House insurance committee, Democrat Frank J. Mautino, received nearly 10% of his campaign contributions from health insurers and HMOs, campaign data show. Only the Democratic and Republican House leaders and the Senate Republican leader received more from the industry.

"State government here has basically been a wholly owned subsidiary of the insurance industry," said Jim Duffett, executive director of the Illinois-based Campaign for Better Health Care.

In Texas, lawmakers pushing legislation to give small businesses more opportunities to challenge large rate hikes couldn't get a bill out the House insurance committee last year. Insurers in Alabama enjoy a special protection in state law that explicitly prohibits the state insurance department from reviewing rates.

Consumer groups and regulators have made some progress elsewhere.

Washington, Colorado and Delaware have recently passed laws to give insurance regulators prior-approval authority. New York this year restored that authority after insurers successfully weakened state regulation in the 1990s.

Louisiana insurance commissioner James J. Donelon, who does not have prior-approval authority now, predicted that all states would ultimately get expanded power.

But few expect that will happen without a fight.

Even in New York, where the industry suffered a major setback this year, insurance lobbyists succeeded in killing a proposal for public hearings to review rate hikes, a tool many consumer advocates believe can bolster oversight.

"The industry still found a sympathetic ear in the capitol," said Mark Scherzer, a consumer attorney who worked on the New York legislation to expand regulators' authority.

noam.levey@latimes.com

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