consumer-protection efforts, which include malpractice suits (Sommers & Epstein, 2011). Dating back to the 1920s, states were also in charge of setting capitalization requirements, regulating marketing and enrollment activities, and in some states even setting the rates paid by insurers to providers in hospitals (Kaiser Family Foundation, The Federal Courts' Role In Implementing the Affordable Care Act, 2014). Despite these rules set forth, the relationship among providers, insurers, and regulators was one where everyone benefitted. Providers would charge insurers high rates that would be paid without question, while regulators did little to make sure that insurance companies were capitalizing their profits (Kovner & Knickman (Eds.), 2011, p. 38). Patients were not being treated fairly and many services were not covered. It took two decades for more regulations to be enacted. In 1974, ERISA was passed with the intention of preventing unfair denial of pensions to employees (Kovner & Knickman (Eds.), 2011, p. 38). As part of the law, states could no longer regulate employee benefit programs. This provision was thus used as a loophole for companies that were self-insured. Under this provision, companies would be exempt from state capitalization, state taxes imposed on insurers, and all other state regulations (Kovner & Knickman (Eds.), 2011, p. 38). Self-insured companies therefore did not have to comply with state regulations that promoted patient protection and are only required to adhere to federal regulatory requirements (Longest, 2010, p. 236). Because the federal government prior to 2010 generally did not impose any requirements, most of the companies remained unregulated (Department of Health and Human Services, 2012). As more private firms learned about this loophole, more became self-insured rather than opting to get coverage through private plans. The American public pressured Congress to act against the managed care industry, however, it was not until 2010 with the enactment of the ACA that comprehensive federal oversight was finally imposed over the private health insurance industry.
consumer-protection efforts, which include malpractice suits (Sommers & Epstein, 2011). Dating back to the 1920s, states were also in charge of setting capitalization requirements, regulating marketing and enrollment activities, and in some states even setting the rates paid by insurers to providers in hospitals (Kaiser Family Foundation, The Federal Courts' Role In Implementing the Affordable Care Act, 2014). Despite these rules set forth, the relationship among providers, insurers, and regulators was one where everyone benefitted. Providers would charge insurers high rates that would be paid without question, while regulators did little to make sure that insurance companies were capitalizing their profits (Kovner & Knickman (Eds.), 2011, p. 38). Patients were not being treated fairly and many services were not covered. It took two decades for more regulations to be enacted. In 1974, ERISA was passed with the intention of preventing unfair denial of pensions to employees (Kovner & Knickman (Eds.), 2011, p. 38). As part of the law, states could no longer regulate employee benefit programs. This provision was thus used as a loophole for companies that were self-insured. Under this provision, companies would be exempt from state capitalization, state taxes imposed on insurers, and all other state regulations (Kovner & Knickman (Eds.), 2011, p. 38). Self-insured companies therefore did not have to comply with state regulations that promoted patient protection and are only required to adhere to federal regulatory requirements (Longest, 2010, p. 236). Because the federal government prior to 2010 generally did not impose any requirements, most of the companies remained unregulated (Department of Health and Human Services, 2012). As more private firms learned about this loophole, more became self-insured rather than opting to get coverage through private plans. The American public pressured Congress to act against the managed care industry, however, it was not until 2010 with the enactment of the ACA that comprehensive federal oversight was finally imposed over the private health insurance industry.