In a press conference this morning, HHS Sec. Kathleen Sebelius released a new report detailing signficant rate increases proposed or attempted by insurers
Anthem Blue Cross isn’t alone in insisting on premium hikes. Anthem of Connecticut requested an increase of 24 percent last year, which was rejected by the state. Anthem in Maine had an 18.5-percent premium increase rejected by the state last year as being "excessive and unfairly discriminatory" – but is now requesting a 23-percent increase this year.
In 2009, Blue Cross/Blue Shield of Michigan requested approval for premium increases of 56 percent for plans sold on the individual market. Regency Blue Cross Blue Shield of Oregon requested a 20-percent premium increase. UnitedHealth, Tufts, and Blue Cross requested 13- to 16-percent rate increases in Rhode Island. And rates for some individual health plans in Washington increased by up to 40 percent until Washington State imposed stiffer premium regulations.
Leading experts have predicted that, without reform, these increases will continue, and the federal government and most states don’t have the legal authority to block or reduce health insurance rate increases.
The report takes a sledgehammer to the insurance companies, setting the stage for next week's summit.
WellPoint and others claim that the premium increases are necessary given the rise in health care costs. While rising health care costs is a known problem with our broken health care system, some of the premium increases requested by insurance companies are 5 to 10 times larger than the growth rate in national health expenditures. All the while, insurance companies and their CEOs continue to thrive.
Recent economic data show that profits for the ten largest insurance companies increased 250 percent between 2000 and 2009, ten times faster than inflation. Last year, as working families struggled with rising health care costs and a recession, the five largest health insurance companies – WellPoint, UnitedHealth Group, Cigna, Aetna, and Humana – took in combined profits of $12.2 billion, up 56 percent over 2008. These health insurance companies’ profits grew even as nominal GDP decreased by 1 percent over this same time period. WellPoint accumulated more than $2.7 billion in profits in the most recent quarter alone.
And recent data show that the CEOs of America’s five largest insurers were each compensated up to $24 million in 2008.17
Now, while insurance companies enjoy increasing profits and CEOs take in millions, American families struggle to find and maintain affordable, quality insurance coverage. A recent study found that almost 75 percent of individuals looking for coverage on the individual market never bought a plan, with 61 percent of those who did not purchase insurance citing premium costs as the primary reason.
The report then lays out the case for reform and specifically how the pending legislation will address it, primarily through demanding transparency from insurers in accounting for rate increases and their spending.
What this means for next week's summit and what the White House wants in terms of specific legislation remains unclear. There have been numerous reports that House and Senate leadership have reached some kind of agreement on a compromise that will be presented as the "White House" plan next Thursday, but Sebelius would not confirm that in the press conference. When asked if the health bill Obama plans to release will be a combination of the House and Senate bill, Sebelius replied "I hope so" and left it at that. The proposal will be made public, Sebelius said, "in a few days."