White House Holds Meeting with Top Insurers

Insuring Resources Commentary:
President Obama has said that he is incorporating GOP ideas into the final last ditch effort to enact health care reform. From the GOP he has heard repeatedly that his plan does not control rising health care costs.

Then on March 5th, as detailed in the article below, he met with Insurers that told him, and his Secretary of Health Kathleen Sebelius, that health care costs are the real problem. His chief budgetary advisor Peter Orszag has also been talking about this for a year. Let's hope its beginning to sink in.

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White House Holds Meeting with Top Insurers

Increasingly cast as the villain in the nation’s rising cost for health care, five of the nation’s largest health care insurers met with the Obama Administration to argue that they are bit players in a much larger production.

The meeting, called by U.S. Department of Health and Human Services Secretary Kathleen Sebelius, focused on premium increases by large insurance companies, the growing focus of health care reform efforts in Washington, D.C., amid a shaky economy.

The White House meeting included Sebelius and chief executives from UnitedHealth Group, WellPoint, Aetna, Health Care Service Corp. and CIGNA, along with a brief appearance by President Barack Obama.

White House spokesman Robert Gibbs said the president “stopped by” the March 4 meeting, armed with a letter from a 50-year-old woman from Ohio, diagnosed with carcinoma and struggling to find affordable health insurance, pleading with the president for help. Gibbs said the letter was “to remind everyone what’s at stake with the final push for health care reform and …what happens if we walk away.” He added that the president talked about the need for comprehensive reform with the health insurance executives, the need to stop blocking such reform on their part and echoed Sebelius’ call for actuarial data justifying large increases in premiums “at a time in which health care inflation is not nearly on the order of magnitude of what we’ve seen here.”

Following the meeting, Sebelius said the nation needs “some transparency” for “people to understand what’s going on.” She said the meeting “focused on what is happening with the kind of jaw-dropping rate increases that people are seeing,” according to media reports.

A Matter of Rising Costs

Ronald Williams, chairman and CEO of Aetna, was one of the attendees of the meeting and told PBS’ Nightly Business Report the session “was a strong focus on understanding the impact that these rate increases are having on working families and individuals who may be reaching the limits of affordability for individual health insurance.”
He added that all parties had a “constructive dialogue” on what is driving rate increases and steps needed to make individual insurance more affordable and sustainable for the future.
“But I think we have to start with the increase in the premium is based on the increase in the health care cost,” Williams said. “And so the premium is a cumulative result of how much more hospitals need and get in their renewals. Some hospitals are asking [for] 40% increases.”

Williams cited increases in pharmaceuticals, in physicians’ cost device and younger, healthier people dropping insurance, making the larger pool “progressively composed of those individuals who tend to be older and sicker and use more services.”
In a statement, UnitedHealth Group President and CEO Stephen J. Hemsley said, “To achieve true and sustainable reform, it is essential to first bring costs under control.

“Trying to focus the debate on insurance premiums masks the complexity of the challenge our country faces to effectively reform our health care system.,” he said. “The cost of insurance is driven by the underlying cost pressures we see throughout the health care system. The majority of our medical cost increases will be from hospitals and doctors charging higher prices and, to a lesser extent, from increased treatment volumes.”
Hemsley added that UnitedHealth Group knows “from first-hand experience” the financial challenges facing nearly 70 million Americans and wants to help find the solution.

“Unfortunately, up to this point the health reform debate has yet to truly confront the cost issue,” he said. “Our participation in today’s meeting affirms our commitment to constructive engagement and a desire to identify a fiscally responsible, sustainable path forward that truly bends the cost curve. If we can slow the soaring cost of care, our shared goal of expanding access and improving quality will be achievable.”

Regulators’ role
Also attending the session were four of the nation’s insurance regulators, representing the National Association of Insurance Commissioners (NAIC).
In a statement, the NAIC said its representatives stressed the importance of thorough and objective rate review, echoing the call for actuarially justified work without discriminating unfairly against any policyholders.

“It is absolutely critical that the state role in assuring the solvency of health plans and promoting competitive markets be preserved,” said Sandy Praeger, chair of the NAIC Health Insurance and Managed Care Committee and Kansas insurance commissioner. “Protecting consumers from high premiums remains a priority, but it is even more important to protect them from insolvency.”