Dead on Arrival: The Health Insurance Industry’s Bleak Prognosis due to Unconstitutional Ratemaking in the Patient Protection and Affordable Care Act
Kopps, Rebecca J.
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The public discussion surrounding health care reform thus far has centered around how the newly enacted law will affect consumers. Yet, the law most profoundly affects the health insurance industry, whose interests have largely been ignored. While the enactment of the Patient Protection and Affordable Care Act was viewed as a triumph for the Obama Administration, it casts a much darker shadow on the future of the health insurance industry that it regulates. Through provisions requiring minimum covered benefits, rate justifications, limits on selecting eligible enrollees, and most notably, an excessively high minimum medical loss ratio, this law involves substantial regulation of the health insurance industry which rises to the level of systematic coercion. The control that the legislature exerts over the insurance industry through PPACA amounts to legislative treatment of the industry like a public utility. As such, in creating this law, ratemaking was wrongly implemented and unconstitutionally applied in a manner that strips the health insurance industry of their Fifth Amendment right to receive a reasonable rate of return on their investments. Although the purported goals of health care reform, such as lowering health care costs, increasing health care quality, and simplifying health care transactions, are undoubtedly noble, the resulting legislation overreaches constitutional legislative power, and will ultimately prove to be a death knoll for the health insurance industry.