House Bill 3120, by Rep. Carol Alvarado
Texas Medical Association Testimony: House Insurance Committee
April 14, 2009
Presented by: Josie R. Williams, MD, MMM, CPE
Texas Medical Association
Good afternoon, Chairman Smithee and members of the committee. My name is Dr. Josie Williams. I am a gastroenterologist and the president of the Texas Medical Association. Today, I stand before you representing nearly 44,000 physicians and medical student members. Currently, I am an associate professor in the Department of Internal Medicine at Texas A&M University System Health Science Center College of Medicine, and director of the Rural and Community Health Institute and the Institute for Health Care Evaluation at Texas A&M, where I specialize in quality and patient safety initiatives. On behalf of the Texas Medical Association (TMA) and nearly 44,000 physicians and medical student members, I would like to thank the chair and members of House Insurance Committee for the opportunity to testify on House Bill 3120 relating to the maximum allowable premium rate increase for small employer health benefit plans.
The availability and affordability of health insurance continues to be a dominant issue for small business. This is of particular interest to TMA from a small business perspective. Approximately 50 percent of TMA's active members involved in direct patient care are either in solo practices or groups of fewer than five physicians - the quintessential small business. These physicians are challenged, like other small businesses to provide health insurance for their own employees. This is noteworthy from a physician and health professional perspective because we know patients with health insurance are more likely to seek preventive care and treatment for chronic conditions earlier than those patients without health insurance. Simply, when employees are well, they are able to work, to be productive, and able to support their families.
To assist small businesses and Texas families in evaluating insurance options in the market and ultimately purchase affordable health insurance coverage, TMA urges the committee to support House Bill 3120. As you heard from Rep. Alvarado, the bill allows the Office of Public Insurance Counsel (OPIC) to assist small employers to challenge, if appropriate, a premium quote that entails an increase of greater than 15 percent. It would allow the small employer and OPIC the ability to ascertain whether the quote increase is fair in light of the employee coverage that will be provided.
It is important for this committee to note that for health insurance, the ability of the counsel to ensure fair rates and adequate rules and forms is limited to nonexistent.
In today's regulatory environment, neither a small-group purchaser nor a large-group purchaser of health insurance has a forum or advocate to question whether the health insurance carrier premium quoted for the small group is fair and adequate, or excessive. The same holds true for the vulnerable individual consumer. Unfortunately, their only option is to look for other quotes or carriers in the market, but they still may not know if the quotes provided by those carriers are in keeping with the premium quote and the coverage that it will provide.
By statute, OPIC is currently authorized to assess the impact of insurance rates, rules, and forms on insurance consumers. OPIC is directed to act as an advocate of positions that are advantageous to consumers in the windstorm and the property and casualty arenas. For these lines of insurance, OPIC has the information it needs to protect consumers and ensure fair rates.
The current authority in Insurance Code Chapter 2251 relates to "any filing under this chapter that is in effect" but does not extend to specific quotes given or specific premiums charged to small- or large-group health insurance policyholders.
Small employers should be able to use OPIC, just as in other lines of insurance, as an avenue to determine whether insurance premium rate quotes are appropriate to afford the coverage offered and not excessive. OPIC would be an excellent compliance facilitator for consumers, providing expertise and insight that consumers generally do not possess. OPIC should act as a facilitator to obtain redress in these particular circumstances if requested to do so.
Closing
Mr. Chairman and committee members, in closing, I want to impress upon the committee that physicians as small businesses support broadening TDI's and OPIC's authority to determine whether health insurance premium rates quoted to employers are appropriate. As a result, health insurers will be responsible for providing a competitive market where every Texan has the opportunity to purchase the coverage they need, at a price they can afford. I will be happy to answer any questions you may have.