IBJNews

White House plans new rules for health insurers

Back to TopCommentsE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

ADVERTISEMENT