Williamsport Sun-Gazette
June 3, 2011

State health group wants more transparency for consumers

By Kristen Nuss

In October, Highmark plans to implement a 9.7-percent average rate increase for 10,600 customers throughout the state, and no one is entitled to an explanation.

A statewide coalition, Pennsylvania Health Access Network, is hoping to change that and wants to see more transparency and consumer protections for state residents.

Thursday evening PHAN invited Lance Haver, director of consumer affairs for the city of Philadelphia, to the Pajama Factory to speak about the topic and advocate for reform.

"Anybody has the right to ask questions about the rate increases," Haver said. "But no one has a right to get an answer."

Haver said the rate increase proposed by Highmark is three times the inflation rate and will affect high-deductible customers, many of whom cannot afford high-quality health insurance premiums, but not a single customer is guaranteed an explanation of how that money will be spent.

Comparing the insurance industry, for which the state has little regulation over, to the regulated utility companies, specifically using phone lines as an example, he noted when the phone company wants to increase its rates, it entails a lengthy process of hearings and testimonies in which the public has a right to the information and to voice its opinion.

The same cannot be said for the process through which insurance rates are negotiated for individuals in the state. Haver said the only notification of Highmark's intent appeared in the PA Bulletin and no hearings were required on the matter.

According to Haver, the state is the third worst in the country when it comes to insurance regulation, with only Alabama and Missouri ranking behind Pennsylvania. He also noted the policies regarding insurance have not changed in nearly 30 years.

He and the other members of PHAN believe leaving the insurance industry to the free market is the wrong approach.

"The free market, while it is elegant and does wonderful things, it does not work for health insurance," Haver said, giving an example of a man having a heart attack shopping around for the best price of ambulance and hospital services.

In the free market, he said, the rational approach is to shop around for the best price, but when it comes to life and death issues, shopping around is no longer a rational choice.

The rate increases proposed by Highmark, as well as other insurance companies, will not only impact the customers but also the taxpayers.

"Every time the rates increase it directly influences the taxpayers," Haver said, noting health insurance costs are eating up the budgets of schools, counties and municipalities throughout the state.

The organization and Haver recognize changes in the system will not happen overnight, but they are circulating petitions, lobbying elected officials and educating the public to increase awareness of the issue.

"The first step in changing the situation is recognizing where we are is not acceptable and demanding reform," Haver said.

For more information about PHAN, visit www.pahealthaccess.org.