Wednesday, July 16, 2008

An 18-Month Wait for Rate Approval

Categories: Insurance Regulation, Michigan

Think that we've got a free market in health care? Not entirely. Here's one example: Blue Cross Blue Shield of Michigan w anted to increase the rates it charges customers in the individual market.

In a normal market with a normal company, BC/BS would analyze business conditions, assess the competition and consumer demand, and act accordingly.

But BC/BS is not a typical business and insurance is not a typical market. For one thing, the company (as with all insurance companies selling individual insurance, I believe), had to beg a government agency for permission. In this case, it's up to the state's insurance commissioner to decide. So BC/BS submitted their paperwork.

That was 18 months ago.

Ken Ross, the commissioner, denied the company's request. And he didn't say what would be an acceptable rate, leaving the company to guess and try again.

IF we're going to subject a business to regulatory approval, the response of government ought to be quick, with clear guidance accompanying any "no" vote.