ANNAPOLIS – Lawmakers in the House Health and Government Operations committee appeared skeptical Wednesday of a bill that would increase the percentage of premium money that insurance companies must spend on health care.
Maryland Insurance Administration Commissioner Ralph Tyler tried to convince the committee that by raising the minimum ratio, which currently sits at 60 percent for individual policies and 75 percent for small group policies, the insurance administration could protect consumers from premium rate increases and force insurance companies to be more efficient.
But Delegate Robert Costa, R-Anne Arundel, argued the actions could do the opposite, forcing insurance companies to increase their rates to maintain a profit, or leave the market. He suggested a more gradual increase of loss ratios.
“My concern comes from the fact that we have smaller [insurance companies] already here,” Costa said. “Would it be better to make sure we’re not squeezing all of the juice out of the orange, and instead of having the good sweet orange juice we’re just going to have tomato juice.”
The skepticism about the bill’s effectiveness was bipartisan. Delegate Eric Bromwell, D-Baltimore County, said he feared insurance companies would leave if the medical loss ratios became unprofitable.
“Not that I think we’re in a perfect situation, it’s that I’m afraid of losing what we have,” Bromwell said.
The bill faces fierce opposition from the health insurance companies. Debbie Rivkin, a lobbyist representing the League of Life and Health Insurers and America’s Health Insurance Plans — two insurance trade groups — said that CIGNA is considering returning to Maryland markets, but not if this bill passes.
“The fact that they’re considering to come back in the individual and small group markets is something we should be applauding,” Rifkin said, “And not passing laws that have the potential to stop them from coming into the state.”
- By Capital News Service’s Erich Wagner