State insurance regulators play many roles in making health insurance more available and affordable to consumers. Two that stand out are enhancing transparency and promoting competition. Every state department of insurance (DOI) has a consumer complaint hotline and provides information to help consumers understand how health insurance works and what health insurance products are available in the local market. Transparency always has been part of the job, but in the fast-changing world of websites and apps that make information readily accessible in ways unforeseen even a decade ago, there is more need than ever to enhance the flow of accurate information and provide more tools in the regulator’s toolkit to accomplish that goal.
Similarly, the role of DOIs in promoting competitive markets is becoming more complex. Much of traditional insurance regulation is designed to maintain a level playing field for fair competition, but health inflation and market consolidation have spawned market conditions that put issues like antitrust enforcement and cost control front and center on the agendas of many insurance regulators. In some cases, insurance regulators are fighting to have a bigger voice on questions such as what provider or insurer consolidations will mean for the affordability of health insurance. In other cases, regulators are being asked to address issues beyond their traditional purviews, such as how to regulate hospital and drug prices.
The purpose of this toolkit is to help insurance regulators understand the wide range of transparency and competition strategies available to them, including new and evolving strategies. We group the strategies into five categories and provide some leading examples and best practices for each category in the five major sections of this toolkit. We also identify important drawbacks or limitations associated with particular strategies, and provide resources for those who want to dig deeper on the featured strategies.
The five sections reflect a progression from basic transparency to targeted transparency to antitrust and other level playing field issues to targeted cost control strategies to systemic efforts to control costs and bend the cost curve. What follows is an overview of the issues covered in each section.