Newspaper article THE JOURNAL RECORD

Can State Insurance Regulators Handle Health Reform Needs

Newspaper article THE JOURNAL RECORD

Can State Insurance Regulators Handle Health Reform Needs

Article excerpt

By Vic Ostrowidzki

Hearst Newspapers

WASHINGTON _ A congressional study questions the ability of state insurance regulators to take on additional responsibilities as part of any reform of the nation's health care system.

The study by the General Accounting Office (GAO), the investigative arm of Congress, says that although it is not clear "what form health care reform may take, it could involve fundamental changes in the health insurance industry."

As a result, the study said, states and "their insurance departments could play a large role in enforcing new requirements should any of these proposals be adopted."

However, the study claimed, states are not equipped to handle additional responsibilities that may be thrust upon them.

The study was requested by Rep. Pete Stark, D-Calif., chairman of House Ways and Means subcommittee on health. Stark, who supports the single-payer, Canadian-style health care system, is one of the leading health care specialists in Congress.

Stark said the GAO report "casts doubt on states' abilities to take on sweeping new duties under President Clinton's proposed health care reforms."

Clinton's plan would give states leeway to design their own reforms and decide which type of operation they want and who would run it.

GAO investigators said their survey found instances of state agencies conducting only "cursory and infrequent" examinations of insurers' finances that often resulted in insurance company failures.

The investigators specifically noted that state insurance regulators in New York, Maryland and West Virginia had failed in recent years to spot serious problems with Blue Cross and Blue Shield programs in their states.

In the case of New York, the investigators said, the insurance department were unable "to detect gross mismanagement, wasteful expenditures, fraud and a history of inattentiveness. …

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