Amid a Congressional fight for health care reform, President Obama and Kathleen Sebelius, secretary of the Department of Health and Human Services, are asking for more transparency among the nation’s insurance providers.

Sebelius met with representatives from the four top health insurers on March 4 to express her concerns about the rising cost of premiums and her desire to work with insurers to bring those rates down to more affordable levels.

During the meeting, Sebelius said Obama referenced the case of a woman from Ohio who is already paying $7,000 in insurance premiums and just got notice that those rates will increase by 40 percent.

“Seeing that kind of rate increase is unacceptable and unsustainable,” Sebelius said. “Not only will comprehensive reform give us more regulatory oversight, more rate review, a partnership with state insurance commissioners, but we will have a different marketplace. We will have some leveraging power for the small business owners and individuals who are victims of a situation where they’re being priced out of health insurance.”

Sebelius would like to see the insurance companies prove why their rates are so exorbitant in an economy where many are struggling. She also sought details on exactly when and why rates increase.

“We are requesting that companies file online their rate increase information starting this year,” she said. “We can begin to have some transparency between the rates that they’re requesting in terms of increases and their justification for those rates.

“We need some transparency,” Sebelius said. “We need people to understand what’s going on because we have a situation where the top five companies filed earnings reports of $12.7 billion in 2009…yet are implementing double-digit rate increases. It just doesn’t make sense to people across America.”

However, health insurers like Aetna say that the rate increase projections are exaggerated and that all increases are made because of rising costs.

“I think we have to start with the increase in premiums is based on the increase in health care cost,” Ronald Williams, CEO of Aetna, told PBS. “Some hospitals are asking 40 percent increases. We see increases in pharmaceuticals. We see increases in physicians’ cost devices, et cetera.”

“Then we’ve had something that really is an effect of the recession and the economy we’ve been struggling with, which is the younger, healthier individuals have ceased to purchase insurance so that the insurance pool is progressively composed of those individuals who tend to be older and sicker and use more services,” he said.

Sebelius refuted that explanation. “One of the strategies that is in play with a number of these companies dividing the market into segments,” she said. “Small-group and individual market often seeing enormous rate increases while the large-group market is not necessarily seeing the same rate increases. It’s not very well applied across the board.”

Disagreements aside, Sebelius said she just wants answers for the American people.

“People need to understand why their rates are sky-high and why they might not be able to afford any insurance next month and next year,” she said.

 

George Barnette

Special to the AFRO