Obama presses health insurers to give details online for rate hikes
Amid consumer furor over rising health insurance premiums, the Obama administration asked insurers on Thursday to post rate hikes – and the justification for them – on the Internet.
Also on Thursday, Sen. Dianne Feinstein, D-Calif., introduced legislation that would give the federal government authority to reject rate increases that insurance companies cannot justify.
The developments come as President Barack Obama intensifies his push for legislation to overhaul the country’s health care system, with escalating premiums his central talking point.
Posting rate increases online would “shine a bright light” on how premiums are set, said Health and Human Services Secretary Kathleen Sebelius.
She met Thursday with the top executives of the country’s largest health insurance firms, including the CEO of WellPoint, whose California subsidiary, Anthem Blue Cross, recently triggered a political firestorm when it raised rates by as much as 39 percent for thousands of customers.
“I’m hoping that the CEOs respond to the call for putting their information up in public,” Sebelius said. “At the very least, they owe it to consumers to justify why the rates are sky high,” Sebelius told reporters after her meeting with insurers and insurance commissioners from four states.
Insurers didn’t outright dismiss the idea, “but there were no commitments of any kind,” said UnitedHealth’s chief executive officer, Stephen Hemsley.
Angela Braly, president and CEO of WellPoint, also took part in the White House meeting, as did Aetna and Cigna executives.
The president made an appearance at the meeting, delivering a letter from an Ohio woman who says her premiums have skyrocketed.
Anthem Blue Cross recently sent letters in the mail notifying its subscribers that it planned to raise rates by as much as 39 percent.
On Thursday, The Bee contacted the office of state Insurance Commissioner and GOP gubernatorial candidate Steve Poizner to ask whether he thinks rate increases should be posted online. Poizner spokesman Darrel Ng responded with an e-mail saying public access to that information already exists in California, albeit not online.
In California, the only venues for the public to view rate filings are in San Francisco and Los Angeles, where the state Department of Insurance allows inspection of the documents.
“The fact that you have to schlep to San Francisco to see these filings is not very transparent,” said Anthony Wright, executive director of Health Access California, among those who have joined the call for greater transparency in how health insurance rates are set.
“Putting them online is a good step in California, where we have very few regulations regarding health insurance rates,” Wright said.
“I think people want to know why” rates are increasing, he said. “It informs consumers as well as policymakers and others who watch the industry. How can they raise rates without justification or even without explanation?”
The rate hikes have spurred public outcry. Politicians in California and Washington have seized on them as an argument for overhaul legislation and wider regulation of the health insurance industry.
Sebelius acknowledged that the federal government and many states, including California, have little authority to bring relief to consumers.
Sebelius called consumers “absolute sitting ducks,” who “don’t have any bargaining power” against insurance companies.
Feinstein’s legislation would give the Health and Human Services Department authority to reject or modify rate increases, according to her office. It would also establish a national Health Insurance Rate Authority.
California’s insurance commissioner, unlike commissioners in at least 25 states, does not have authority to regulate premiums.
Anthem Blue Cross executives grilled at state Capitol
Leslie Margolin, Anthem Blue Cross president, testifies Tuesday at an Assembly Health Committee hearing on her company’s decision to hike premiums as much as 39 percent on hundreds of thousands of Californians. She said Anthem, the state’s largest for-profit health insurer, wasn’t seeking profits beyond what she called slim margins of 2 to 5 percent.
Anthem Blue Cross executives, under intense questioning by the state Assembly’s Health Committee on Tuesday, defended the company’s decision to raise premiums by as much as 39 percent on hundreds of thousands of Californians.
The panel’s chair, Assemblyman Dave Jones, D-Sacramento, expressed skepticism during testy questioning that at times provoked awkward silences by the company’s president, Leslie Margolin.
“How much profit is enough?” Jones asked. Margolin paused uncomfortably.
After collecting her composure, she said that her company, the state’s largest for-profit health insurer, had no interest in profits beyond what she said were slim margins of 2 to 5 percent.
“Have you no shame?” Jones asked soon after – to which Margolin expressed disappointment at the question.
“We work so hard to do the right thing every day,” she said.
The rate hikes have become a lightning rod for those looking to recapture the political momentum in the effort to overhaul the country’s health care system.
Tuesday’s grilling at the state Capitol served as a prelude for congressional hearings today in Washington, where executives for Anthem’s parent company, WellPoint, could face a similar barrage of questions because of the controversial rate hikes.
And the increases have become a talking point on the campaign trail. Jones is seeking to become the state’s next insurance commissioner. He is also pushing a bill that would allow the Department of Insurance to review premium hikes, giving it the same approval authority that 1988’s Proposition 103 granted it for car and property insurance.
Meanwhile, the person currently in the commissioner’s job, Steve Poizner, is seeking the Republican nomination for governor. On Monday, Poizner accused Anthem Blue Cross of more than 700 claims-handling violations during the past three years. The violations could lead to fines of more than $7 million.
Earlier this month, Poizner got Anthem Blue Cross to delay implementation of the premium increases until May 1 to allow a state actuary to determine if the hikes comply with state law. The company said it plans to go through with the hikes at that time.
The Anthem Blue Cross executives said higher premiums were needed to cover the rising cost of doing business, citing escalating costs for medical care and the net loss of 25,000 subscribers last year. Many of those who left were young, healthy people who are less likely to need health services and whose premiums subsidize those who more frequently require services.
“Even with this rate action, our premiums are competitive with other health plans in California,” said Jim Oatman, an Anthem Blue Cross vice president. “Clearly, we understand that these increases create a challenge for many of our members.”
Oatman expects about 15 percent of the company’s more than 800,000 individual-policy subscribers to drop their coverage this year because of the premium hikes.
Laurel Kaufer, a self-employed single mother from Woodland Hills who has two sons in college, could see her monthly premium jump from $823 to $1,102 – an increase of 34 percent – she told the committee. Her plan has a $3,000 deductible and 30 percent co-pays, she said.
“Because of these relentless rate hikes and out-of-pocket costs, I measure the need for each visit to the doctor,” she said.
Margolin, the president of Anthem Blue Cross, sought to broaden the conversation beyond her company.
“This debate, and this inquiry today, cannot and should not be just about Anthem Blue Cross, and it cannot and should not be just about the insurance industry,” she said. “It is about acknowledging our respective responsibilities for the failings of our system, and it’s about talking collective action to address and eliminate those failings.”
The company, however, has had a long combative history with legislators in California and on Capitol Hill who have pushed unsuccessfully for health care legislation.
In 2007, the company spent $2 million on an advertising blitz that helped derail Gov. Arnold Schwarzenegger’s campaign to require all Californians to obtain health insurance and force insurers to issue policies to anyone, regardless of health.
On Tuesday, Anthem Blue Cross found some sympathy from Health Committee members.
“Who can withstand this scrutiny?” Assemblyman Anthony Adams, R-Hesperia, noted after the withering questioning from Jones and other Democrats.
“I don’t see a problem with making a profit,” added Assemblyman Ted Gaines, R-Roseville. “I thought that was the American way.”
Marian Mulkey, a senior program officer with the nonpartisan California HealthCare Foundation, provided a historical view of escalating health premiums that showed premiums outpacing the rate of inflation.
Since 2002, the cost of living has risen 23 percent, while health insurance premiums have increased 117 percent, she said. “The question is, how long can this continue?”
Assemblyman Dave Jones, the Health Committee chair, blasted Anthem Blue Cross President Leslie Margolin Tuesday, asking: “Have you no shame?”
Anthem Blue Cross executives grilled at state Capitol
Leslie Margolin, Anthem Blue Cross president, testifies Tuesday at an Assembly Health Committee hearing on her company’s decision to hike premiums as much as 39 percent on hundreds of thousands of Californians. She said Anthem, the state’s largest for-profit health insurer, wasn’t seeking profits beyond what she called slim margins of 2 to 5 percent.
Anthem Blue Cross executives, under intense questioning by the state Assembly’s Health Committee on Tuesday, defended the company’s decision to raise premiums by as much as 39 percent on hundreds of thousands of Californians.
The panel’s chair, Assemblyman Dave Jones, D-Sacramento, expressed skepticism during testy questioning that at times provoked awkward silences by the company’s president, Leslie Margolin.
“How much profit is enough?” Jones asked. Margolin paused uncomfortably.
After collecting her composure, she said that her company, the state’s largest for-profit health insurer, had no interest in profits beyond what she said were slim margins of 2 to 5 percent.
“Have you no shame?” Jones asked soon after – to which Margolin expressed disappointment at the question.
“We work so hard to do the right thing every day,” she said.
The rate hikes have become a lightning rod for those looking to recapture the political momentum in the effort to overhaul the country’s health care system.
Tuesday’s grilling at the state Capitol served as a prelude for congressional hearings today in Washington, where executives for Anthem’s parent company, WellPoint, could face a similar barrage of questions because of the controversial rate hikes.
And the increases have become a talking point on the campaign trail. Jones is seeking to become the state’s next insurance commissioner. He is also pushing a bill that would allow the Department of Insurance to review premium hikes, giving it the same approval authority that 1988’s Proposition 103 granted it for car and property insurance.
Meanwhile, the person currently in the commissioner’s job, Steve Poizner, is seeking the Republican nomination for governor. On Monday, Poizner accused Anthem Blue Cross of more than 700 claims-handling violations during the past three years. The violations could lead to fines of more than $7 million.
Earlier this month, Poizner got Anthem Blue Cross to delay implementation of the premium increases until May 1 to allow a state actuary to determine if the hikes comply with state law. The company said it plans to go through with the hikes at that time.
The Anthem Blue Cross executives said higher premiums were needed to cover the rising cost of doing business, citing escalating costs for medical care and the net loss of 25,000 subscribers last year. Many of those who left were young, healthy people who are less likely to need health services and whose premiums subsidize those who more frequently require services.
“Even with this rate action, our premiums are competitive with other health plans in California,” said Jim Oatman, an Anthem Blue Cross vice president. “Clearly, we understand that these increases create a challenge for many of our members.”
Oatman expects about 15 percent of the company’s more than 800,000 individual-policy subscribers to drop their coverage this year because of the premium hikes.
Laurel Kaufer, a self-employed single mother from Woodland Hills who has two sons in college, could see her monthly premium jump from $823 to $1,102 – an increase of 34 percent – she told the committee. Her plan has a $3,000 deductible and 30 percent co-pays, she said.
“Because of these relentless rate hikes and out-of-pocket costs, I measure the need for each visit to the doctor,” she said.
Margolin, the president of Anthem Blue Cross, sought to broaden the conversation beyond her company.
“This debate, and this inquiry today, cannot and should not be just about Anthem Blue Cross, and it cannot and should not be just about the insurance industry,” she said. “It is about acknowledging our respective responsibilities for the failings of our system, and it’s about talking collective action to address and eliminate those failings.”
The company, however, has had a long combative history with legislators in California and on Capitol Hill who have pushed unsuccessfully for health care legislation.
In 2007, the company spent $2 million on an advertising blitz that helped derail Gov. Arnold Schwarzenegger’s campaign to require all Californians to obtain health insurance and force insurers to issue policies to anyone, regardless of health.
On Tuesday, Anthem Blue Cross found some sympathy from Health Committee members.
“Who can withstand this scrutiny?” Assemblyman Anthony Adams, R-Hesperia, noted after the withering questioning from Jones and other Democrats.
“I don’t see a problem with making a profit,” added Assemblyman Ted Gaines, R-Roseville. “I thought that was the American way.”
Marian Mulkey, a senior program officer with the nonpartisan California HealthCare Foundation, provided a historical view of escalating health premiums that showed premiums outpacing the rate of inflation.
Since 2002, the cost of living has risen 23 percent, while health insurance premiums have increased 117 percent, she said. “The question is, how long can this continue?”
Assemblyman Dave Jones, the Health Committee chair, blasted Anthem Blue Cross President Leslie Margolin Tuesday, asking: “Have you no shame?”
California likely must forge own way on health, forum experts say
The discussion Thursday was to have focused on how California could begin implementing sweeping federal legislation to remake the country’s health care system.
Instead, some of the state’s top health care experts, convening for a health care forum in Sacramento, expressed uncertainty about whether California should just move ahead with its own plan to cover the state’s nearly 7 million uninsured.
“This is an awkward time to be having this conversation,” noted Kim Belshé, the state’s director of health and human services.
With the future of a federal health care overhaul now steeped in doubt, states like California may have to forge ahead – with or without the federal government, she and others said Thursday.
“We got to get on with it … regardless of what’s happening on the federal agenda,” said Belshé, one of about a dozen experts taking part in the forum convened by the Center for Health Improvement and the California HealthCare Foundation.
With 7 million uninsured and a similar number enrolled in Medi-Cal, the government insurance program for the poor and disabled, there is growing urgency to address the state’s costly health care woes, the experts agreed.
In a mere two years, public spending on health care could account for more than half of all U.S. health care spending, according to a government report released Thursday. For cash-strapped states like California, which spends about a sixth of its general fund on Medi-Cal, the burden is cause for alarm.
Health spending in the United States last year reached $2.5 trillion, and it consumes an ever increasing portion of the budget of recession-battered families, according to the study.
The larger-than-expected increase – the biggest single-year expansion of the health care industry’s share of the U.S. economy since 1960 – caused alarm among some of the state’s top health experts gathered in Sacramento.
Published Thursday in the policy journal Health Affairs, the study is based on projections by the federal Centers for Medicare and Medicaid Services. It does not take into account any possible effects of health care legislation.
“The data matters because of what they represent – they represent real people. … They represent thousands personal stories,” said Micah Weinberg, a senior research fellow at the New America Foundation.
But whether California can muster the political will to take major action on its own is uncertain. Gov. Arnold Schwarzenegger came close, but his plan to remake the state’s health care system in 2007 unraveled when the Republican governor and Democratic leaders failed to gain support of the rank and file.
Overhaul efforts aren’t over, Belshé said.
Whatever form it takes, she said, there would be “an essential role for states – that’s not going to change.”
Licking their wounds, health care advocates ask, ‘What now?’
For months, a health care overhaul seemed so within reach. Then came Tuesday’s Senate vote in Massachusetts, and suddenly the hopeful mood that once buoyed health care advocates from coast to coast turned into a vast sinkhole of disappointment.
Anthony Wright, executive director of Health Access California, couldn’t bear the news as election returns from Massachusetts added up to a resounding victory for Republican Scott Brown and a clear defeat for Democrats and health care advocates.
“Haven’t watched any cable news tonight. Given my mood, no good can come from it,” Wright tweeted Tuesday night.
On the morning after, overhaul advocates in California expressed disappointment that Democrats had lost their filibuster-proof majority in the Senate, portending increasing difficulty to pass sweeping health care legislation.
While efforts on the national level are far from dead, one question seemed clear: What now?
“We’ve been talking things through, trying to figure out what this all means, and working out strategy,” said Michael Russo, the health care advocate at the left-leaning California Public Interest Research Group.
Russo and other consumer advocates on Wednesday took stock of the new environment in which supporters of a health care overhaul must tread. “There’s no doubt that we’re not as cheery as we were,” Russo said. “It seemed like such a clear path to getting a health care reform bill enacted just a few days ago. … Certainly, now it seems harder to get there.”
Democrats on Capitol Hill tried not to look back Wednesday, as the road that could have led to a health care bill took an unexpected twist.
In November, House Democrats narrowly won passage of sweeping measures to overhaul the country’s health care system. The Senate approved its own package the day before Christmas.
Following the Massachusetts vote, the White House signaled that it would seek to take a more deliberate approach to winning passage of a health care bill. Democratic leaders were said to be considering scaling back the legislation to salvage what they could. The long-held ambition of near-universal health insurance coverage, in a country with 46 million uninsured, could be jettisoned from the legislation – a clear victim of the new political realities.
President Barack Obama urged lawmakers to scale back legislation to “those elements of the package that people agree on.”
Some key tenets could survive the purge, including subsidies to help low-income people pay for health insurance and guaranteed coverage for those with pre-existing health problems.
If Congress failed to pass a health care bill, “it would be very disappointing because we have come a very long way,” said state Sen. Mark Leno, D-San Francisco, a member of the Senate Health Committee. “Should it not succeed, it does indeed give greater importance to leadership coming from state legislatures,” he said.
Leno has authored the latest iteration of a state single-payer health care bill – which twice before won passage only to be vetoed both times. The Senate Appropriations Committee is to consider the legislation today.
Other members of the Legislature say California has a role to play, even if Congress does act.
“I do think there will be a federal health care bill,” said Assemblyman Dave Jones, D-Sacramento, who chairs his chamber’s Health Committee. “But I’ve always thought California should still have the flexibility to improve upon it.”
Just a few years ago, the state seemed poised to act on its own, with Gov. Arnold Schwarzenegger on the brink of winning support for universal health care in California.
In the end, he could not bridge the differences between some liberals and factions in his own Republican party.
In the absence of comprehensive change, California has taken a piece-by-piece approach. Last year, the governor signed legislation banning gender discrimination in health insurance coverage, outlawing the practice by insurance companies of charging different premiums for men and women.
Consumer advocates have been unable to secure many items on their wish lists, such as guaranteed health insurance coverage regardless of pre-existing conditions, a protection included in federal legislation now steeped in uncertainty in Congress.
The same challenges that vexed health care advocates in California have intensified on the federal level, particularly in light of Tuesday’s vote.
“I think the need and urgency for health care reform is the same today as it was the day before. It’s the same this year as it was last year. It didn’t change because of a special election in Massachusetts,” said Wright, of Health Access California.
“It happened in a state where health reform is needed least, because they’ve already adopted many of the elements of health care reform,” he said of the Massachusetts vote. “Sure, there’s a lot of symbolism” in Tuesday’s election results, he said. “But there’s an underlying math that health care advocates still have 59 votes in the Senate.”
“It seemed like such a clear path to getting a health care reform bill enacted just a few days ago. … Certainly, now it seems harder to get there.”
MICHAEL RUSSO, the health care advocate at the left-leaning California Public Interest Research Group