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).

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).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.