Health Inc.

Feds To Insurers: Quit It With The Misinformation And Big Rate Hikes

The argument between the administration and the nation's insurance companies over the costs of health overhaul just keeps rolling along.

A woman's pointing finger.

Now the feds are fingering insurers for blame. iStockphoto.com hide caption

itoggle caption iStockphoto.com

In the latest twist, Health and Human Services Secretary Kathleen Sebelius fired off an angry letter to Karen Ignagni, head of the trade group American's Health Insurance Plans, that says the administration has "zero tolerance" for insurers blaming unjustified premium increases on the new health law.

You can read the full text here, or read on for our translation.

Dear Karen,

Stop hating on our heath overhaul law! Blaming us for your higher insurance bills has got to stop — and now. I mean it!

Yes, it's true that in a couple of weeks our law will stop your members from capping payments over a person's lifetime and revoking coverage after someone gets sick, unless there's fraud. Oh, and yes, those young people (up to age 26) who really don't cost you that much to insure anyway can get covered on their parents plans, too.

And, sure, new health plans will have to do more stuff, including covering preventive care at no cost to patients and letting women see ob-gyns without getting a referral.

But, all the economists, analysts, think tanks and health plans we pay attention to say the new things we expect your members to do should add only a percentage point or two to premiums.

Finally, the way we see it, the law will mean Americans will save money on health spending out of their own pockets.

So, please stop your people from saying such nasty things about our law, and whatever you do, don't let them even try to pin your rate hikes on us.

Yours,

Kathleen

We asked AHIP for comment on Sebelius's original letter. Here's an unedited statement from Ignagni we got by e-mail:

Health insurance premiums are increasing because of soaring prices for medical services, the impact of younger and healthier people dropping their insurance during the weak economy, and additional benefits required under the new law.  The new health care reform law mandates that health insurance coverage include a wide range of new benefits beyond what many families and small businesses previously purchased.  It’s a basic law of economics that additional benefits incur additional costs, and the impact on premiums depends on the type and amount of coverage policyholders had before.   Health plans will continue to do everything they can to incorporate all of these new benefits while keeping health care coverage as affordable as possible for families and employers.

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