“A New Diagnosis” Focuses on Private Health Insurance Market Reform
Texas Impact today released a study calling for extensive and long-overdue reforms in the private health insurance market in Texas. The report, “A New Diagnosis: Building the Private Market to Improve Health Coverage for Texans,” is released in anticipation of a Sunset Commission hearing on continuation of the Texas Department of Insurance scheduled for Tuesday in Austin.
The report notes that the rate of uninsured Texans is a national scandal, with over 5.5 million Texans without access to health care—25 percent of Texans are uninsured compared to 16 percent of Americans.
Eighty percent of uninsured Texans live in households with at least one working person. While past efforts to improve health coverage have focused on public programs like Medicaid and CHIP, the main source of the discrepancy between Texas and the US is Texas’ poor rate of private insurance coverage. The percentage of Texans covered by the private health insurance market (employer-sponsored coverage or individually-purchased policies) is six points below the national average. If Texas’ private market coverage rate rose to the national average, the report concludes, an additional one million Texans would have health insurance–and without costly investment of taxpayer dollars.
“For years we’ve worked to strengthen programs like Medicaid and CHIP that serve the most vulnerable Texans. But the private market is the appropriate venue for most Texans to obtain health insurance,” said Bee Moorhead, Texas Impact’s executive director. “In 21st century Texas, health insurance isn’t an optional commodity, it’s a necessity—both for individual health consumers and for the sustainability of the state’s health care infrastructure.”
The report makes several recommendations, including:
- strengthening TDI oversight of health insurance rates;
- a premium tax credit for insurer participation in pooling arrangement like small-employer health benefit cooperatives, a high-risk pool for individuals, and a reinsurance pool;
- narrowing Texas’ overly-broad “rate band” pricing system which causes wide disparities in health insurance costs for similar groups with no accountability to consumers for price swings; and
- establishing a new Center in TDI to work with insurers and consumers on market innovations to expand access to private insurance
“We don’t expect the private health insurance market to be perfect—but Texas should come closer to national norms,” Moorhead continued. “When one out of every four potential health insurance customers here can’t get served, it’s time to try some new strategies.”
The report’s principal author is former State Board of Insurance member Deece Eckstein.
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