Aetna CEO Admits Insurers Will Increase Premiums In The Near Future

Aetna CEO Ron Williams

Aetna CEO Ron Williams

Last Tuesday, CIGNA CEO David Cordani told Neil Cavuto that health care premiums will continue to increase despite the new health care law and now, Aetna CEO Ron Williams tells Charlie Rose that his company also plans to jack up rates:

ROSE: Will insurance premiums go up?

WILLIAMS: The answer is yes, and some of the things that will drive those premiums are significant additional taxes the industry will ultimately have to pay in the first year.

ROSE: The President said that this bill would not have any impact on people who already had coverage, that it was about the uninsured, that there would be no change. Will this legislation change the coverage of people who are already paying for it?

WILLIAMS: My perception is, yes, things will change. You might not have a plan that includes the exact same doctors. You might have plans that have richer benefits, and therefore you’re going to pay more for benefits you may or may not want. It would have been a better message to say, we’re going to make certain you maintain your eligibility.

It’s interesting to hear Williams blame any future premium increases on the new taxes on the insurance industry. These guys are always acting like they have no say in how much they increase premiums, no matter how much the increases outpace medical inflation or how well the company is doing in terms of profits and CEO compensation. But Williams’ statement is particularly galling because the health care law does not actually impose any taxes on insurance issuers until 2014 — almost four years after the law goes into effect. Insurers argued that imposing the taxes immediately would lead to higher premiums and Democrats pushed them back to 2014 to avoid any steep rate hikes.

But, CIGNA and Aetna are both suggesting that they will still increase premiums in anticipation of the new insurance regulations and if Democrats don’t pass some serious rate control reforms, it’s unlikely that the health care law will grow in popularity. Peter Harbage has some ideas for how to do that here.