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White House plans new rules for health insurers

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President Barack Obama’s health-care proposal will include new rules for insurance companies and greater oversight on the industry, Health and Human Services Secretary Kathleen Sebelius said in an interview.

“More oversight, more transparency, and new rules for health insurers are going to be part of health reform,” Sebelius told Bloomberg Television. She mentioned medical loss ratios, which mandate how much insurers have to spend on health benefits as opposed to administrative costs.

Obama will release a proposal to restart the health-care debate before a bipartisan White House meeting on Feb. 25. He wants a final bill to be “comprehensive,” Sebelius said.

The president will offer a single proposal that takes “some of the best ideas” from House and Senate bills as well as “a number” of Republican ideas, Sebelius said. Obama has challenged Republican leaders to present their own health-care plan at the meeting. A senior White House official said the plan will be posted by the morning of Feb. 22. Sebelius said talks on the administration’s proposal are continuing.

Democrats in Congress are reconciling differences between versions of legislation passed last year by the House and Senate that’s aimed at expanding coverage to millions of uninsured Americans while curbing costs. House Democrats say that while the two chambers are close to an agreement, they may not have a unified plan in time for the televised meeting.

Sebelius targeted health insurers this week, releasing a report that questioned proposed premium increases by companies such as Indianapolis-based WellPoint Inc., the biggest U.S. insurer of individuals and small businesses.

“If we don’t pass health reform, we will have people locked out of the market because of pre-existing conditions, driven out of the market because they simply do not have the extra cash to be able to pay these increases,” she said.

The White House report on Feb. 18 highlighted 2009 premium increases that she said “are five to 10 times larger than the growth rate in national health expenditures.” It also focused on 2009 profits and executive pay at U.S. insurers.

The report follows her inquiry into WellPoint’s proposed 39-percent premium rise for Californians who buy their own insurance. WellPoint has been called to testify before Congress about the increase on Feb. 24.

Sebelius said health legislation would require of insurers “transparency on what amount of money that they’re collecting—are they really paying on health claims.” She said it would force them to show how much money is going for executive compensation, advertising and overhead costs.

She said during a news conference earlier this week that insurance company profits are “way over anybody’s estimates.” She said the five largest U.S. insurers took in combined profits of $12.2 billion in 2009, 56 percent higher than in 2008.

Insurers said they are being scapegoated. “It’s time to stop the politics of vilification,” Karen Ignagni, president of America’s Health Insurance Plans, said in a statement.

Ignagni attributed rising costs in the individual market to “the urgent need to reduce the growth of underlying medical costs and to bring everyone into the system.”

WellPoint executives said unexpectedly high costs made the California premium increase necessary. “Premiums were insufficient to cover the higher costs,” Brian Sassi, head of WellPoint’s consumer business unit, said in a Feb. 18 interview.

Bradley Fluegel, the company’s chief strategy officer, said the increase wasn’t making up for money lost in 2009.

“We’ve already lost that money,” he said. “We just have to reflect on a go-forward basis the higher costs.”

Both the House and Senate bills would place new limits on insurers, barring them from rejecting clients because of a pre-existing condition. They would also require all Americans to get insurance or pay a penalty, offering government aid and creating online exchanges where individuals and small businesses could shop for insurance.

A compromise bill was set to pass both chambers when Democrats lost a special Senate election in Massachusetts that cost them the 60th seat they needed to overcome Republican efforts to block passage. Faced with the impasse, Obama invited Republicans to sit down with Democrats at the Feb. 25 meeting to discuss ways forward.

Mike Steel, a spokesman for House Republican Leader John Boehner of Ohio, said if Democrats want bipartisan cooperation they must understand it “means a clean sheet of paper, not an infomercial for another Democratic backroom deal.”

Should the Democrats be unable to gain any Republican support, one avenue open to them is using a budget process known as reconciliation that would require only a simple majority of 51 votes in the Senate. Still, that would force them to slim down the bill because it must be limited to spending and tax issues.

Another alternative is for the House to try to pass the bill the Senate approved on Christmas Eve along with a reconciliation measure that would include some of the provisions favored by the House such as more generous subsidies to help people buy insurance and greater aid to the elderly in purchasing medication.
 

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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