INDIANAPOLIS – Behind-the-scenes frustrations came to the forefront Wednesday as insurance companies and medical providers butted heads on growing health care costs.
The topic has been simmering for several years with lawmakers passing transparency bills for hospital procedures and other medical services.
But the focus swung to insurance premium increases Wednesday as Sen. Liz Brown, R-Fort Wayne, brought a bill to require insurance companies to be more transparent about why their prices are rising.
“The intent is to have transparency in the health insurance space,” she said in the Senate Health and Provider Services Committee. “What does it cost and why does it cost so much?”
Senate Bill 249 would require an insurer to go before the Department of Insurance if a health plan's proposed rate increase is 5% or more. The purpose is to see what is spurring those increases – for instance, medical costs or profit increases.
Brian Tabor, president of the Indiana Hospital Association, said a lot of work has already been done on the provider side of the equation. This includes limits on surprise billing, providing good faith estimates and posting procedure costs. Now it is time for insurance companies to go under the same scrutiny.
“What goes into the calculation for insurance premiums is kind of a black box,” he said.
Tabor said businesses see their premiums escalate even as costs are being reduced on the hospital side and deserve transparency on why.
But the Insurance Institute of Indiana objected to the bill. It represents major insurers like Anthem as well as smaller health plans such as Physicians Health Plan of Northern Indiana.
Maddie Augustus of the Insurance Institute of Indiana said Brown removed some of the problematic language from the bill but there are still concerns. She said some of the information that would be provided to the Department of Insurance is proprietary and will limit competition in the marketplace.
Logan Harrison, senior public affairs director at Anthem, was much more blunt in his testimony.
He said the bill is a deflection away from hospital and physician prices. He also claims insurance companies already file detailed information every year on premiums. Harrison previously worked at the Indiana Department of Insurance under two governors.
Harrison said the Indiana Hospital Association has gotten desperate because of the microscope it has been under on costs.
He called the bill “a preemptive strike” and said he didn't understand why the measure is moving since stakeholders are in negotiations currently to find ways to decrease costs.
That is because House Speaker Todd Huston and Senate President Pro Tem Rodric Bray sent a sternly worded letter in December demanding all sides of the industry come to the table and present ways to reduce Indiana medical costs so they match neighboring states.
The deadline is April 1.
“Absent a viable plan, we will be left with no choice but to pursue legislation to statutorily reduce prices,” the letter said.
The bill passed 10-1 and now moves to the full Senate.
Sen. Vaneta Becker, R-Evansville, said it seems insurance companies want to dictate that hospitals show their cards but don't want to show their own.