Obama Gets Tough on Insurers, Releases New Regs

WASHINGTON -- President Barack Obama and Health and Human Services (HHS) Secretary Kathleen Sebelius warned insurance companies not to impose outsize premium increases while healthcare reform is being implemented.

"They shouldn't see it as an opportunity to enact unjustifiable rate increases that don't boost care and inflate their bottom line," the president said in a Tuesday afternoon speech from the White House.

Obama spoke following a meeting with Sebelius, White House officials, state insurance commissioners, and insurance company executives.

VIDEO of The President touting the need for and effectiveness of the health care bill.
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In a call with reporters, Sebelius said she is urging state insurance commissioners to investigate suspicious premium increases and said the federal government is also monitoring such increases.

"We wanted to caution insurance companies that rate increases would be watched very closely," Sebelius said, adding that insurance commissioners are very receptive to performing rate reviews in their states.

The Patient Protection and Affordable Care Act (PPACA, also known as the healthcare reform law) doesn't give the federal government explicit authority over the rates that insurance companies charge.

Tuesday's meeting comes a day after the nonprofit Kaiser Family Foundation released the results of a survey that found people who buy health insurance on their own experienced, on average, a 20 percent increase in the cost of their premiums over the past year.

"There is no question that we're seeing rate increases that are way above inflation and those are hard to justify," Sebelius said.

Seven state insurance commissioners; Karen Ignagni, president and CEO of America's Health Insurance Plans; and executives from Blue Cross Blue Shield, Aetna, WellPoint, Kaiser Permanente, Cigna, and Humana were listed on the White House meeting roster.

During the meeting, insurers reminded the administration that overall healthcare costs must be kept down in order for insurance to be more affordable, said Sebelius, who called that an "accurate point."

Obama also announced that his administration issued several guidance regulations for specific patient-focused provisions that are set to become law under the PPACA.

He borrowed a term from an earlier time, calling the collective provisions the "Patients' Bill of Rights."

"Today, I'm announcing that the Departments of Health and Human Services, Labor, and Treasury are issuing new regulations under the Affordable Care Act that will put an end to some of the worst practices in the insurance industry, and put in place the strongest consumer protections in our history -- finally, what amounts to a true Patient's Bill of Rights," Obama said.

One of those regulations bans insurers from denying coverage for children with preexisting medical conditions.

The PPACA is "vague" on what rules insurers are required to follow for such children, said Jeanne Lambrew, director of the Office of Health Reform at HHS, but the new regulation provides some specifics.

It states that insurers cannot deny coverage to a child or young adult under age 19 based on an illness or disease, and they can't carve out specific exclusions. For instance, insurers couldn't specifically deny coverage for chemotherapy for a pediatric cancer patient, explained Lambrew on the media call.

Insurers will prohibited from denying adults coverage based on a preexisting condition beginning Jan. 1, 2014.

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