Health Insurance Regulation: Wide Variation in States' Authority,
Oversight, and Resources (Letter Report, 12/27/93, GAO/HRD-94-26).

Although state insurance departments are responsible for overseeing
health insurers and protecting consumers, their authority extends over
only part of the market and varies widely among states. Moreover, more
and more states have elected to self-insure their health plans under the
Employee Retirement Income Security Act of 1974, thereby avoiding state
regulation.  About 24 percent of health care is now paid for by private
health insurance that is regulated by state insurance departments.
Although the National Association of Insurance Commissioners has tried
to establish a uniform, nationwide system of insurance regulation, it
has no authority to require states to adopt its model policies; this
responsibility falls to state legislatures.  The resources that state
legislatures allocate to their insurance departments and the proportion
that the departments dedicate to regulating health insurance also vary
widely among states.  State insurance departments work to protect
consumers from insurer failures, unfair policy provisions, excessive
premiums, and unscrupulous business practices--any of which could
financially devastate policyholders. GAO found wide variations in the
practices and the procedures that states use to monitor insurer
solvency, approve health insurance premium rates and policy forms, and
respond to consumer complaints. As Congress reviews the various
proposals for health care reform, it needs to consider what role, if
any, state insurance departments will play in enforcing new requirements
that may be imposed on health insurers.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HRD-94-26
     TITLE:  Health Insurance Regulation: Wide Variation in States' 
             Authority, Oversight, and Resources
      DATE:  12/27/93
   SUBJECT:  Health insurance
             Health insurance cost control
             Insurance regulation
             Human resources utilization
             Consumer protection
             State-administered programs
             Insurance companies
             State governments
             Financial management
             Insurance premiums
IDENTIFIER:  California
             Colorado
             Illinois
             New York
             Texas
             Vermont
             Virginia
             Medicare Program
             Medicaid Program
             National Health Care Reform Initiative
             Clinton Health Care Plan
             Health Security Act
             
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