Archive for Thursday, March 4, 2010

Sebelius chastises insurance executives over double-digit rate increases; Kansas’ Praeger says, ‘People are reaching the breaking point’

March 4, 2010, 12:12 p.m. Updated March 4, 2010, 2:47 p.m.


— Health and Human Services Secretary Kathleen Sebelius told the nation’s leading health insurers Thursday to publicly justify a spate of double-digit premium hikes that have infuriated consumers in at least a half dozen states.

Meeting at the White House with the CEOs of Wellpoint, Aetna, Cigna, 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 coverage.

“At the very least, we need some transparency,” Sebelius told reporters 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.

The White House staged the event to underscore what it calls the urgent need to pass President Barack Obama’s health care overhaul. Obama advisers hope that highlighting the rate hikes will put pressure not just on insurers to lower rates but also on Congress to agree on final legislation after a yearlong effort.

Obama has pointed to the rate hikes as one of the main arguments for Congress to pass his plan. It would set up a new competitive marketplace for individual customers and small businesses, leading to more predictable premiums. It also would create a new consumer protection body with the power to deny unreasonable rate hikes, roll them back and obtain refunds for policy holders.

Sebelius got a polite hearing from the executives, but there was no agreement on her request for full disclosure.

“I think the response to it was constructive, but there were no commitments of any kind,” said UnitedHealth CEO Stephen Hemsley.

Angela Braly, the head of Wellpoint, said she wants to explore with the National Association of Insurance Commissioners better ways to tell consumers about the reasons for rate hikes. Doctors and hospitals are charging more, she explained, and “we’re often in the position of being the bearer of bad news.”

Noting that the companies are making healthy profits, Sebelius said she will keep pressing her request. “At least the bright spotlight may help to discourage some of these wildly exorbitant increases from occurring,” she said.

Obama dropped by the meeting in the Roosevelt Room and underscored Sebelius’ point that such rate hikes can’t go on forever. The president has painted a bleak picture of spiraling costs and eroding coverage if lawmakers fail to pass his plan — and he’s keeping the pressure on insurers as he demands a vote in Congress.

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 percent.

Since then, Sebelius said she’s heard from many Americans who are worried they won’t be able to afford insurance. 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.

Although the insurance industry opposes much of Obama’s overhaul plan, the CEOs said they share the administration’s concern about rising cost. It’s leading their healthiest customers to drop coverage, leaving the companies with a relatively sicker pool of people.

Aetna’s Ronald Williams praised the administration for bringing the group together and said: “This is what we need more of — everyone at the table collaborating.”

“People are reaching the breaking point,” when it comes to premiums, said Sandy Praeger, Kansas’ insurance commissioner.


Flap Doodle 8 years, 3 months ago

In other health care news: “Tonight, Barack Obama will host ten House Democrats who voted against the health care bill in November at the White House; he's obviously trying to persuade them to switch their votes to yes. One of the ten is Jim Matheson of Utah. The White House just sent out a press release announcing that today President Obama nominated Matheson's brother Scott M. Matheson, Jr. to the United States Court of Appeals for the Tenth Circuit.” The Chicago Way rides again.

emptymind 8 years, 3 months ago

If Sebilus and Praeger are serious about this, something would get done, the sooner the better. Wait and see, but a 39% increase is totally ridiculos and criminal. It's already too late for many families who have lost their insurance and can't afford it. And even if you are lucky enough to have it, it costs too much to get sick. What has happened?

douglas6280 8 years, 3 months ago

What is next, having Dillons and WalMart justify increasing the price of milk? What right does our government have to pry into a private business in this way?

KSManimal 8 years, 3 months ago

douglas6280 (anonymous) says... "What is next, having Dillons and WalMart justify increasing the price of milk? What right does our government have to pry into a private business in this way?"

Our government already "pries into private business" by way of antitrust law. If Dillons and WalMart agreed not to sell in each other's geographic territories, and conspired to fix prices while raising the cost of milk 20% - 40% per year several years in a row.... that would constitute a felony.

However, insurance companies do exactly that, legally, because they are granted antitrust law exemptions under the McCarran-Ferguson Act. Funny how the same folks who cry "competition is good" suddenly argue against reforms that would have them play by the same rules as everyone else.

wastewatcher 8 years, 3 months ago

Both Sebelius and Praeger show shock and dismay about insurance rate increases,but neither of them will do anything but put on a good act. Look at their campaign accounts in their election efforts for Insurance Comm. And Governor. They can't take the Insurance money and then really do something to punish them. They are both phonies when it comes to this issue.

Jim Phillips 8 years, 3 months ago

Hmmmmm! I thought the insurance companies could not raise their premiums without government approval. If this is true, perhaps Kathy should explain why the rate increases were approved.

Charles L. Bloss, Jr. 8 years, 3 months ago

Do chastise mean what I think it means? It do. Way past time to do something, but then she never was a fireball. Thank you, Lynn

KEITHMILES05 8 years, 3 months ago

Kathy needs to STFU and administrate one of the largest government agencies known to mankind. I am soooooooooooooooo glad this nitwit took her silly act to DC. She was a disgrace to Kansas.

Liberty275 8 years, 3 months ago

We basically just doubled our health insurance so we get paid to get sick. My wife and I split the cost. We didn't need the government involved in our decision.

It isn't bad enough to buy votes for this stupid legislation with money and free medicaide, now the liar has used the appointment of a federal judge to help buy this "law". Crooked chicago politics has indeed taken over America.

My breaking point is the federal government forcing me to buy a product from a private company simply because I am a citizen of the US. 2012 can't get here soon enough.

bender 8 years, 3 months ago

Liberty, guess you sold your car back when the government started forcing you to buy a product from a private company (auto insurance) simply because you owned a car?

notajayhawk 8 years, 3 months ago

bender (anonymous) says…

"Liberty, guess you sold your car back when the government started forcing you to buy a product from a private company (auto insurance) simply because you owned a car?"

1) You don't have to own a car.

2) You don't have to have insurance to own a car, just register and drive it.

3) You don't have to carry car insurance to cover your personal losses, only liability insurance to cover damages you cause to someone else.

Don't worry, those are pretty common mistakes, bender.

notajayhawk 8 years, 3 months ago

Sorry, 'just register and drive it' should have said 'only to register and drive it'.

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