Consumer Group Says Loopholes in Healthcare Overhaul Could Hurt Public

A consumer group called Thursday for the Obama administration and Congress to address 10 potential glitches in the new healthcare overhaul law, saying loopholes could leave millions of people with reduced health benefits or higher insurance costs.

Source: Source: LA Times | Published on April 9, 2010

In a letter to President Obama and lawmakers on Capitol Hill, Consumer Watchdog of Santa Monica said the legislation — which requires most Americans to carry health insurance by 2014 — fails to limit how much insurers can charge for coverage. Obama had proposed greater federal oversight of insurance rates, but the idea failed to survive congressional negotiations over the final healthcare reform law he signed last month.

No major revisions to the healthcare law are expected any time soon because of the difficulties of passing healthcare legislation in an election year. Since its passage, most calls for change have come from opponents who think it went too far.

Oversight for health insurance rates is left to states, many of which have limited authority to curb the costs. That is the case in California for people who buy policies on their own rather than receiving insurance through employers.

Consumer Watchdog wants Congress to enact tougher guidelines so that insurers across the country have to seek "prior approval" for rate hikes. A similar proposal is now under consideration in the California Legislature. Under that plan, insurance companies would have justify large rate hikes, following the same strict regulation that has covered automobile and other types of property insurance for the last two decades.

The consumer group identified what it said were other problems with the healthcare reform law. It said, for example, that further regulatory oversight is needed to bar insurers from canceling coverage once policyholders become sick, a practice known as rescission. And it said that additional congressional action is needed to curb pharmaceutical costs by allowing Medicare, the federal healthcare program for seniors, greater bargaining authority.