Sebelius Emphasizes Transparency of Costs to Health Insurance Providers

By Denise Reynolds

President Obama called health insurance executives to a meeting on Thursday to discuss the “jaw-dropping rate increases”.  Health and Human Services Secretary Kathleen Sebelius instructed the insurance companies to be more transparent when seeking higher premiums.

According to Sebelius, “The top five largest for-profit insurance companies filed earnings of $12.2 billion last year while dropping coverage for 2.7 million Americans.”

Executives attending the meeting included the CEO’s of United Health Group Inc, WellPoint Inc, Aetna, Inc., Health Care Service Corp, and Cigna Corp.  Also attending were officials from the National Association of Insurance Commissioners.  President Obama dropped by briefly to deliver a letter from Natoma Canfield, a cancer survivor from Ohio whose health insurance premiums had increased over 40% in the past year.

Sebelius asked the companies to give insurance consumers justification for raising rates, including filing rate requests online along with data to show loss trends to support those requests.  She asked that they be transparent on administrative costs and marketing efforts to give an overall picture of their revenue and expenses.

According to the Wall Street Journal, WellPoint executives have blamed their increases in California for the recent tax increase for Anthem Blue Cross Blue Shield.  They say that rising medical costs have increased about 39% as individuals are gradually becoming older and sicker.  At the same time, younger, healthier people are dropping coverage.

Companies are also blaming pharmaceutical companies, medical-device makers, hospitals and other health care companies that are driving up the cost of medical care.

WellPoint chief Angela Braly told reporters after the meeting that they would work with the National Association of Insurance Commissioners on the issues.  The group also discussed methods on slowing the rate of health care inflation and emphasize preventive care and chronic disease care to reduce costs.

President Obama in the meantime has been pressing Congress to deliver final legislation on the health care reform bill.  He met at the White House on Thursday with House Democrats, some of which are expressing a concern that the overhaul does not include a public plan to compete with private insurers.