To advance healthcare reform, Obama comes down on insurers

By vilifying insurance companies “for political reasons,” Obama is shooting the messenger, Mr. Zirkelbach added in an interview. “All the focus is on health insurance premiums with very little focus on the underlying medical costs that are driving those increases.” Drug companies and hospitals are more significant drivers of healthcare increases, he adds.

According to the Centers for Medicare and Medicaid Services, health plan costs increased 73.5 percent from 2000 to 2009. That compares with 104.2 percent for prescription drugs, 82.8 percent for physician and clinical services, 82.5 percent for hospital care, and 82.7 percent for total national health expenditures, over the same period.

But 10-year averages do not capture the sharp increases consumers have seen from companies such as Anthem Blue Cross in California, which recently announced increases of 39 percent. Obama and Democratic leaders on Capitol Hill have seized on this announcement as Exhibit A for why Congress needs to act.

In a letter to leading insurance companies on Monday, US Department of Health and Human Services Secretary Kathleen Sebelius called on the CEOs of Aetna Inc., CIGNA HealthCare Inc., Health Care Service Corp., UnitedHealth Group Inc., and WellPoint Inc. to publicly justify proposed premium increases.

She urged companies to “post on your websites the justification for any individual or small group rate increases you have implemented or proposed in 2010, and continue to post such a justification in connection with any future increases.

“Posting this information will give Americans the opportunity to learn more and ask questions about rate increases that affect them,” Ms. Sebelius wrote.

Health policy analysts in a recent conference call with Anthem Blue Cross also pressed for this information. “There is a valid analytical point for why rates might be going up at this particular time,” says Henry Aaron, a senior fellow at the Brookings Institution in Washington.

For example: In hard economic times, when consumers have to cut their own costs, “Are you more likely to drop your coverage if you’re a healthy youngster or a sickly middle-aged person,” Mr. Aaron asks. One reason insurance companies are raising premiums now could be that their own costs are higher because healthy, younger people are opting out of the insurance pool as a cost-cutting measure.

“The don’t-shoot-the-messenger point has real plausibility,” Aaron says. But it’s important to see the data supporting it, he added.

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