Health Insurers Say They’re Sick Of State Rules Claim Regulations Attract Sickly People, Which Is Costly; But State Official Says It’s Too Soon To Toss Policy

Washington medical insurers complained Thursday that state rules are attracting costly sick people to their rolls while driving away healthy enrollees, costing them millions of dollars.

But a top state health-policy official said it was too early to consider jettisoning the 3-year-old regulations when there might be other solutions.

The views came at a hearing of the Senate Financial Institutions and Housing Committee, and recapped a longrunning struggle between insurers and backers of regulations intended to provide Washington residents more access to health care.

Committee Chairwoman Margarita Prentice, D-Seattle, said her panel had decided to step into the fray “to get past all the fighting and get some answers on what the problems are and figure out ways to fix them.”

The regulations include a requirement that health insurers cover anybody who applies so long as they pay the premium cost; a requirement that insurers cover pre-existing conditions after a three-month wait; and a provision barring insurers from charging individuals rates based on their health status. The regulations are what’s left of the state’s landmark 1993 health-care overhaul law, largely repealed in 1995.

“I know one answer to this dilemma is to get rid of health-care reform, but I think it is too early and the situation too volatile to take that step,” said Bernie Dochnahl, head of the state Health Care Policy Board.

Dochnahl’s agency recommends health-care policy to the Legislature. She said the board still believes health insurers suffering multimillion-dollar losses in the “individually insured” market can be rescued by changing the law to force distribution of the risk among a wider group of people.

Such an approach was rejected by the 1996 Legislature, but Dochnahl noted it was a short session and the proposal needs more consideration. Some of the regulations may need revision, including the pre-existing condition clause, which could be too liberal, she said.

But overall, she added, the state should pursue its underlying goal of providing affordable health coverage to all, rather than simply shutting out the sick because they cost too much.

But representatives of big insurers painted the same hopeless picture they did during the 1996 session.

They argued that the regulations, in combination, attract sick people and drive away healthy people who decide to go without insurance because they can’t afford the higher rates generated by the sick enrollees.

Spreading the risk among more insured groups would not solve that fundamental problem, contended Margaret Lane, a spokeswoman for King County Medical.

Forcing business insurance pools, for example, to share the risk with those covered individually would drive businesses into “self-insurance” pools, she said. Such arrangements, by federal law, cannot be regulated by the state.