It apparently takes a financial stimulus of a different kind to jump start states into an investigative mood. Just days after the announcement of the availability of funds^[1] for oversight of insurance rate hikes by the feds for states’ use, Pennsylvania’s governor announces the scrutiny of nine insurers there.

The insurance rate review process is milking opportunity in the window prior to the reform law’s provision to make underwriting as a mechanism for premium rate setting illegal as it pertains to medical history (existence of prohibitive pre-existing conditions). In 2014, once the law makes this provision ironclad, insurers will have to resort to other mechanisms to underwrite policy terms — such as community-based ratings. As things stand right now, small insurers in very competitive markets are keen to medical history underwriting to gain share over major players — such as the regional Blues —  which employ tested methods in markets where patient demographics encourage fiscally advantageous claims patterns. | LINK

1. Health & Human Services Secretary Kathleen Sebelius on 6/7/10 announced the availability of $51 million in grants for states to create and strengthen the insurance rate review process. [↩]

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