Health insurers challenged to justify rate increases to the public
Health and Human Services Secretary Kathleen Sebelius told the nation’s leading health insurers Thursday to justify publicly a spate of double-digit premium hikes that have infuriated consumers in at least half a dozen states.
Meeting at the White House with the chief executives of WellPoint Inc., Aetna, Cigna and UnitedHealth Group as well as several state insurance commissioners, Sebelius asked the companies to post online their justification for proposed rate hikes primarily affecting customers who directly purchase their own coverage.
“At the very least, we need some transparency,” Sebelius said after the meeting. “We need people to understand what’s going on.”
The information can be difficult to obtain, since it’s usually filed state by state.
President Obama has pointed to the rate hikes as one of the main arguments for Congress to pass his healthcare overhaul plan now. It would set up a new competitive marketplace for individual customers and small businesses, leading to more predictable premiums, he argues. His plan also would create a new consumer protection agency with the power to deny unreasonable rate hikes, roll them back and obtain refunds for policyholders.
“That kind of rate increase is just unacceptable and unsustainable,” Sebelius said, noting that the companies are making healthy profits. “At least the bright spotlight may help to discourage some of these wildly exorbitant increases from occurring.”
Reinforcing his top healthcare official, Obama dropped by the meeting in the Roosevelt Room and underscored the point that such rate hikes can’t go on forever. The president has painted a bleak picture of spiraling costs and eroding coverage if Congress fails to pass his plan.
The rate increases mainly affect people buying their own coverage directly, as opposed to the majority who have employer provided policies. WellPoint subsidiary Anthem Blue Cross recently announced plans to boost individual insurance premiums in California by as much as 39%.
Since then, Sebelius has heard from many Americans who are concerned that they will be priced out of the market. WellPoint has temporarily put its rate hike on hold.
Sebelius said the long-term solution is the new health insurance marketplace that Obama wants to create for individuals and small businesses. Once it goes into operation in 2014, it would foster competition and help keep rate increases in check, she said.
Although the insurance industry opposes much of Obama’s overhaul plan, the chief executives said they share the administration’s concern about rising costs. It’s leading their healthiest customers to drop coverage, leaving the companies with a relatively sicker pool of people.
Aetna’s Ronald Williams said the administration, states and insurers share a common goal: “Making sure working families have access to affordable healthcare.” He praised the administration for bringing the group together and said: “This is what we need more of -- everyone at the table collaborating.”
“We want the insurance market to work for everyone,” he added.
“People are reaching the breaking point” when it comes to premiums, said Sandy Praeger, Kansas’ insurance commissioner. “As important as rate oversight is, it will ultimately fail unless costs are contained. The real key will be bending the cost curve. Unless we do so, premiums will continue to rise uncontrollably with or without reform.”
Sidot writes for the Associated Press
