Sebelius Demands Health Insurance CEOs Explain Rate Hikes

As part of the White House’s final push on health care reform, Health and Human Services Secretary Kathleen Sebelius on Monday called for health insurance executives to publicly explain why they are raising premiums.

“It’s time for these insurance company CEOs to do their part to make the system more transparent for the American people,” she said in a formal letter. “If insurance companies are going to raise rates, the least they can do is tell us why.”

This follows up on a meeting last week with CEOs from five major health insurance companies, where Sebelius said all parties involved agreed that more transparency would benefit everyone. She in turn asked them to post their proposed rate increases and the actuarial data supporting them online.

In a letter to UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc. Sebelius asked the insurers to disclose information such as cost increase estimates, explanations for their necessity, the number of people who will receive such increases and an explanation of measures the companies are taking to improve the affordability of health care.

The health secretary has led the effort from the administration to call attention to the ever-rising insurance premiums that many have to face, citing figures such as Anthem Blue Cross’ plan to increase rates by as much as 39 percent for some customers.

Insurers have argued that these increases are necessary because of increasing medical costs and the current economic situation, which has caused them to lose customers, especially healthier individuals. This leaves behind a risk pool of people who are sicker and cost more to insure, which in turn continues to drive up prices and push more people out of health care.

The premium rate increase “highlights why we need sustainable health care reform to manage the steadily rising costs of hospitals, drugs and doctors,” Anthem said in a statement last month.

President Obama wants to pass the health bill before he leaves for Asia on March 18 and lawmakers leave for a two-week break. But concerns persist among Democrats, who are unsure whether the president’s deadline can be met or enough votes can be gathered in the House on time.

Republicans also have continued to argue the current proposal should be abandoned because most Americans don’t want it and it is too expensive to implement at a time when the US faces economic difficulties.

“We are drowning already in a sea of debt … We’re looking at $10 trillion in new debt in the next 10 years,” said Senate Minority Leader Mitch McConnell in an interview Sunday. “I think the American people are saying to us, stop this job-killing health care bill, we know it will drive taxes up and that will not be good to help us get out of the recession, step back and terminate the spending spree.”

Sebelius argued that the Congressional Budget Office, a neutral and nonpartisan agency, said the plan will lead to about $150 billion in savings in the first ten years, followed by almost $1 trillion in deficit reduction.

When discussing Republican opposition to the measure, Sebelius said that while President Obama’s bill includes many Republican ideas such as selling insurance across state lines and measures to combat fraud and abuse, a fundamental divide continues to be the amount of regulation needed to provide more oversight for the insurance industry. Disagreement on this fundamental issue might hamper getting bipartisan support.
“Though there are lots of Republican ideas in the bill … we are hopeful that there will be Republican votes, but I’m not sure there will be,” she said on Sunday.

However, she said that the administration does want things to move more rapidly, and that this is probably why President Obama called for an up-or-down vote and the rapidly approaching deadline.

“One of the things that happens in legislative sessions in state legislatures is that they have a timetable,” she said. “We have to pass a budget. You have to move things forward. That’s what I get from Americans all over the country. They want something to be done.”