Judge Heard What Healh Care Law Did Not Say

It’s ironic that the ultimate fate of the nearly 3,000 page Patient Protection and Affordable Act (PPACA) may hinge on what was not included in the legislation.

Today’s ruling by a federal appellate court judge in Florida that the law’s individual mandate provision is unconstitutional is certainly important, but even more significant is that the judge also ruled that entire law must be struck down on the basis on non-severability. In other words, if a single provision does not pass constitutional muster, then it all gets thrown out.

This is particularly interesting because shortly after the passage of PPACA, it came to light that the law did not include a severability provision, which is a pretty standard clause for most comprehensive legislation. To this day no one really knows for sure the reason for this important omission, although the most likely theory is that it was drafting error made in the rush to pass the legislation.

Then-Speaker Nancy Pelosi famously said that we needed to pass the bill to know what’s in it. Apparently we also needed to pass the bill to know what was not in it.

I have written and commented about this small but important legislative detail frequently over the past year. On more than one occasion someone has challenged me that it is not realistic to think that the entre law could be thrown out even if specific provision were voided by the courts. Conventional wisdom misses the mark once again.

So it’s off to the Supreme Court we go and we’ll see if at least five justices hear what the health care law did not say.

Personal Umbrella Liability and Board Service

I am often questioned by a board of directors member who is concerned with their personal liability for their service on the board.



I hear it from board members of non-profit boards and the boards of corporations, alike.



The question goes like this:



"I have a personal umbrella policy that covers me for my actions on this board. Why do we need directors and officers liability?"



A variant is...



"Should I buy a personal umbrella policy in case the directors' and officers' insurance is inadequate?



First, a personal umbrella policy is designed to expand your personal liability insurance and your auto liability insurance by adding $1,000,000 (or more) of coverage.



If you have a $500,000 personal auto policy plus a $1,000,000 personal umbrella policy, you have a total of $1,500,000 of liability coverage for an auto accident.



Your home insurance policy provides personal liability. A $1,000,000 umbrella policy adds $1,000,000 of coverage above the basic policy.



Both the auto policy and the personal liability insurance on your home insurance pays for bodily injury and property damage. The umbrella policy also pays for bodily injury and property damage. The lawsuit must come from somebody being injured or property being damaged.



Directors' and officers' insurance is purchased to protect board members from lawsuits involving poor decisions:



-an employee sues for wrongful termination.



-an employee sues for harassment.



-a community member sues a non-profit for failure to deliver services.



-a stockholder of a for-profit company sues the directors for poor management that results in loss of investment.



D&O insurance excludes bodily injury and property damage - organizations buy general liability insurance for the exposure of bodily injury and property damage.



So, Mr. Board member, you might need a personal umbrella insurance policy. However, it will not protect you from the same things that directors and officers insurance will cover.

Hearing Thursday on transparency for health insurer rate increases

A state Senate committee will hold a hearing at 1:30 p.m. Thursday in Olympia on a couple of our key legislative requests.

The first -- and the less controversial -- is that we retain the authority to review health insurance rate hikes in the individual market (e.g. insurance you buy yourself, instead of get through an employer.) If this bill doesn't pass, our authority do review those rates on behalf of consumers will end at the end of the year -- and the feds will do it instead. This is Senate Bill 5398.

The more controversial bill -- at least among insurers -- is our proposal to make public all the information that health insurers send us when filing for a rate increase. As things stand now, much of that information is secret. Hundreds of consumers have told us that they feel they have a right to see it. And we agree.

We're arguing that consumers should have the right to see what they're paying for, and exactly what's driving the large premium hikes in recent years. Everyone's data would be released, making it a level playing field for all the companies. (The bill is SB 5120.)

We don't have to look far to see how this process would work, because Oregon is already doing it. What's more, that state's largest health insurer said it supports a transparent filing process.

Washington State Insurance Commissioner Mike Kreidler testified about the transparency proposal last week in front of a House committee. Here's an excerpt:

Seattle Times weighs in on health insurer surpluses

Speaking of our legislation involving large surpluses held by nonprofit health insurers, the Seattle Times just posted an editorial on the topic.

It recounts testimony at Thursday's hearing in a state House of Representatives committee:

The companies testified against any penalty for piling up surplus, raising the specter of earthquakes, epidemics and President Obama's health-care reform. The first two might bite into their holdings, and the third, they said, surely would. They said they need every cent they have.

"How much is enough?" asked Rep. Kevin Van De Wege, D-Sequim.

Their answer was a thing with no defined form — something about consumers needing "strong, muscular companies." Van De Wege asked his question again, and again received vapor.
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