KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Health Law Only Small Part Of Insurance Rate Increases

The Seattle Post Intelligencer reports on a 16.3 percent premium hike this year by Regence BlueShield, Washington state's largest health insurer, which was the "the forth year in a row of double-digit increases." After the increase, "company reserves grew and executive salaries mostly increased, a review of state documents has found. … Regence's surplus also grew by 12 percent last year, to $893 million. That was after falling in 2008 ... Consumer groups are lobbying for insurers - when required to disclose information - to give up data on executive salaries, surplus, brokers' fees, and advertising and lobbying dollars." But "[s]pokespeople for Regence, Premera and Group Health - the state's largest insurers - defended their company's surplus, saying a substantial reserve is vital in case of adverse events" (Ho, 10/25). 

NPR reports that rate increases across the country "are being blamed on the new health law." But is that really the cause? "Absolutely not, says Jay Angoff, who heads the Office of Consumer Information and Insurance Oversight for the U.S. Department of Health and Human Services. ... 'To the extent that the insurance companies blame the new law for rate increases, they know better,' Angoff says. 'They've said themselves that the new law would only raise rates by between 1 and 2 percent.' And even those increases would pay for a number of new benefits."

"Insurance industry consultant Robert Laszewski says there's still another reason premiums are rising so rapidly right now, particularly for individuals: the bad economy." As healthy people dropped coverage, "the insurance risk pool is full of sicker people, and premiums go up faster. But Laszewski says even if the currently rising premiums can't be blamed directly on the new health law, its backers still have a very big problem: The law doesn't do enough to bring down the rising cost of health care" (Rovner, 10/28).

The Providence Journal: "The state is seeking comment on a request by Tufts Health Plan to increase rates slightly for employer-offered insurance to cover the costs of new benefits mandated by the federal health-care overhaul. Tufts, the smallest of the three health-care insurers in the state, is requesting a 0.7 percent increase in its base rate and a 0.9 percent overall increase for those who elect coverage for their families. ... The increases would pay for the coverage of dependents through age 26 and preventive services that now must be provided without cost to the consumer" (10/28).

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