The Administration’s latest “reg dump” of proposed rules, released last Friday, includes some interesting new requirements on health insurers. According to pages 259-260 of the proposed rule, the Department of Health and Human Services will impose a mandate of more than half a billion dollars on insurers, to track “9 billion claims and enrollment files:”
Issuers will be directed to make risk adjustment and reinsurance data accessible to HHS in a way that conforms to HHS-established guidelines and applicable standards for electronic data collection and submission, storage, privacy and security, and processing. In addition, in §153.720(a), we propose requiring these issuers to establish a unique masked enrollee identification number for each enrollee, in accordance with HHS-defined requirements and maintain the same masked enrollee identification number for enrollees that enroll in different plans within the issuer, within the State, during a benefit year….
We estimate that this data submission requirement will affect 1,800 issuers, and will cost each issuer approximately $327,600 in total labor and capital costs (including the average cost of $15,000 for a data processing server) during the start-up year. This cost will be lower in future years when fixed costs decrease. This cost reflects an estimate of 3 full-time equivalent employees (5,460 hours per year) at an average hourly rate of $59.39 per hour. We anticipate that approximately 400 data processing servers will be established across the market in 2014, and these servers will process approximately 9 billion claims and enrollment files. Therefore, we estimate an aggregate burden, including labor and capital costs, of $589,680,000 for all issuers as a result of these requirements.
Over and above the obvious privacy implications these new Washington-inspired requirements present, there’s one obvious question: How does imposing more than half a billion dollars in costly new mandates help lower health costs? Candidate Obama promised repeatedly that his health plan would CUT premiums by an average of $2,500 per family – but creating new paperwork requirements seems like a great way to RAISE costs, not lower them.