Pennsylvania Bill Limits Insurers Ability To Base Rates On Health History

Armen Hareyan's picture

The Pennsylvania House onTuesday voted 131-72 to approve legislation (HB 2005) that would limit theability of insurers to consider certain factors, such as health history, whensetting rates for health plans offered to individuals and small businesses, thePittsburg Post-Gazette reports. The measure would allow insurers toset rates based on age and geographic region.

The bill also would require insurers to spend 85% of premiums on health care. Insurersviolating the rule could be required to issue rebates to policyholders. Inaddition, the legislation would allow the Pennsylvania Department of Insurance to disapprove requests for rateincreases if an insurer has not operated efficiently or has not controlledcosts for avoidable hospital-acquired infections or chronic disease management.

The provisions of the bill are similar to those included in Gov. Ed Rendell's(D) Prescription for Pennsylvania plan to reduce health care costsand improve quality, the Post-Gazette reports. Rendellspokesperson Chuck Ardo said, "The governor is certainly pleased thatprogress is being made and is hopeful legislators will see the urgency ofworking on the rest of the plan."


The House on Tuesday also approved legislation (HB 2098) that would allowinsurers to not pay hospitals for preventable medical errors that result indeath or serious disability (Fahy, Pittsburgh Post-Gazette, 4/2).

Opinion Piece

Pennsylvania lawmakers areconsidering proposals that would "provide health insurance for all by'aggregation,' or patching together" existing state and federal programsand employment-based insurance with "new state pools and/orsubsidies," Theodore Marmor, a professor emeritus at the Yale School of Management, and Jerry Mashaw, a professor at Yale Law School, write in a PhiladelphiaInquireropinion piece.

They continue that while the "patchwork approach has obvious limitations... it avoids the massive political obstacles to a complete overhaul ofexisting health insurance arrangements," and Rendell's "particularapproach has much to like," as it is "more serious about cost controland unified coverage than the Massachusettsprogram, or the proposals of the presidential hopefuls," they write. ThePennsylvania House has approved "a similar, though less ambitious,version" of Rendell's plan, according to Marmor and Mashaw.

Rendell's plan "mixes his administration's thoughtful reform withfashionable platitudes," such as the idea that expanded coverage ofpreventive medicine and wellness programs will generate savings, but whilethese "may be admirable, ... no industrial democracy has constrained thecosts of universal health insurance through such devices," the piecestates. It concludes, "Such appeals represent the persistent pursuit ofpanaceas," and "[s]etting panaceas aside would make Pennsylvania's reform approach moreconvincing" (Marmor/Mashaw, Philadelphia Inquirer, 3/31).

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