HHS Report Scolds Insurers For Rate Hikes, Points To Increases As Reason For Reform
According to an Obama Administration report released Thursday, double-digit insurance premium increases such as the proposed 39 percent one by Anthem Blue Cross in California are a "worrisome sign of the times," The Associated Press reports.
In addition to California, six other states - Maine, Michigan, Washington, Connecticut, Oregon and Rhode Island, are seeing similar proposals for premium increases, noted the Department of Health and Human Services report. "With his drive for health care overhaul bogged down, President Barack Obama has seized on the Anthem premium increases as Exhibit A to make his case for sweeping change before a bipartisan White House summit next week. WellPoint executives blamed their rate increases on rising medical costs and a pool of customers that is gradually becoming older and sicker as younger, healthier people drop their coverage" (Alonso-Zaldivar, 2/18).
The Hill: "The HHS report rejects that argument and counters that 'some of the premium increases requested by insurance companies are 5 to 10 times larger than the growth rate in national health expenditures'" (Young, 2/18).
Reuters: In the report, the administration concluded "(t)hese massive increases are disturbing examples of the problems that make reforming our health insurance system more important than ever." It also looked at profits for insurers: "Profits for the 10 largest insurance companies rose 250 percent from 2000 to 2009, 10 times faster than inflation, the report said. The top five - WellPoint, UnitedHealth Group Inc, Cigna Corp, Aetna Inc and Humana Inc - took combined profits of $12.2 billion, up 56 percent from 2008, it said" (Krauskopf, 2/18).
ABC News reports that HHS Secretary Kathleen Sebelius said during a Thursday press conference "the profits were out of line with the increase in health care costs. 'To suggest that this is entirely in line with even health care costs, which clearly are still exceeding typical inflation costs, these profits are wildly excessive, are way over anybody's estimate,' Sebelius said" (Hovell, 2/18).
The Wall Street Journal: "The administration is trying to make its case that House and Senate-passed health-care legislation ... would bring down costs for consumers and enable more people to purchase health insurance." But Republicans maintain that reform bills "would actually drive up premium costs for many, and they point to a Centers for Medicare and Medicaid report showing the legislation would cause national health expenditures to increase." A hearing will be held next Wednesday by the House Energy and Commerce Subcommittee on Oversight and Investigations "regarding the Anthem Blue Cross rate increases." The panel's chairman, Rep. Bart Stupak, (D., Mich.) and Energy and Commerce Chairman Henry Waxman, (D., Calif) "wrote to Wellpoint Thursday requesting additional details about the company's contention that the premium increases came in part because healthy individuals chose not to enroll in plans because of broader economic turbulence." They say enrollment in Anthem Blue Cross individual plans rose 7 percent last year (Yoest, 2/18).
Politico's Live Pulse: Karen Ignagni, president of America's Health Insurance Plans - the insurers' trade group - said in a release that "(i)ncreases in the cost of coverage in the individual market shine a spotlight on the urgent need to reduce the growth of underlying medical costs and to bring everyone into the system. If reform doesn't address these pieces, it will not solve the serious problems that individuals, families, and employers face." She also said in the release that "(i)t's time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation" (Frates, 2/18).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.