Insurers Will Receive Presidential Warning While Administration To Release Regulations To Protect Consumers
President Obama will warn health insurance executives at a White House meeting Tuesday against trying to increase premium rates before the new law takes effect, The New York Times reports. "The White House is concerned that health insurers will blame the new law for increases in premiums that are intended to maximize profits rather than covering claims." Though states, not the federal government, retain the power to regulate rate hikes, Washington will soon have the ability to shine a "bright spotlight" on insurance prices, according to HHS Secretary Kathleen Sebelius.
"Our message to them is to work with this law, not against it; don't try and take advantage of it or we will work with state authorities and gather the authority we have to stop rate gouging," David Axelrod, a senior Obama adviser, told the Times (Sack and Stolberg, 6/21).
The warning won't be Obama's first stern words for the industry, The Wall Street Journal reports. "For months, the White House blasted insurers for sharply increasing premiums and denying care to customers as Democrats tried to rally support for the legislation. But no industry is more critical to making the law roll out smoothly, and since March when the president signed the law, the Obama administration has tried at times to strike a more cooperative tone." Beginning next year, insurers will have to spend as much as 85 percent of premiums collected on medical costs, a threshold the Kansas insurance commissioner, a Republican, said some smaller insurers may struggle to meet (Adamy, 6/22).
Kaiser Health News: "Scott Serota, president and chief executive officer of the BlueCross and BlueShield Association, is one of the health insurance executives who will attend. 'It's a good opportunity to discuss pragmatic ways to implement (health) reform regulations,' said Brett Lieberman, a BlueCross and BlueShield spokesman." The meeting is set to start at 11:45 a.m. (Carey, 6/21).
The Associated Press: After the meeting, Obama is "expected to announce regulations for implementing consumer safeguards enacted by the law, according to administration allies who were briefed in advance and spoke on condition of anonymity." The new regulations apparently will include an end to lifetime and annual spending limits and the practice of rescission - dropping coverage after people become sick, among other things (Alonso-Zaldivar, 6/22).
The Hill's sources also expect regulations covering those provisions of the law, and in a blog post, the publication adds that "the expected regulations are what's called an interim final rule, which means they will have force of law but can be retroactively modified depending on industry and consumer feedback after they're adopted" (Pecquet, 6/21).
Politico Pulse spoke to health consultant Alec Vachon, who says, "We expect the regulation will follow the statute, which is straightforward on these issues. But it's surprises we really look for" (Haberkorn and Kliff, 6/22).