"Insurers’ Contradictory Argument On Health Reform And Premium Increases"
This morning, AHIP President and CEO Karen Ignagni appeared on Fox News to defend the notion that the health care law is substantially contributing to skyrocketing premiums. Insisting, quite correctly, that premium growth follows health care costs, Ignagni stressed that the law’s early benefits are similarly raising rates:
IGNAGNI: Health care premiums follow underlying costs. Costs are going up because providers are charging more, number one…two, people buying coverage individually in a bad economy have decided for their economic reasons they sometimes is no longer afford it, that means the cost to people in the pool goes up because it’s the people who have the highest cost who stay in. And then third, we’re adding new benefits, starting September 23rd, under the legislation, and new benefits follow cost. [...]
Our members are working very, very hard to try to do things as affordably as possible but for people who have coverage now, many of them are going to see increased coverage requirements, new benefits, new requirements, and that will require additional costs. Our members are trying to do this as affordably as possible.
One question Hemmer should have asked is just how much these “new benefits” cost. Because according to the folks at the Urban Institute the so-called September 23rd provisions could lead to increases of no more than 3% — and that’s the very highest estimates. Why then are insurers attributing 9% spikes to the health care law? And, if they’re doing everything they can to keep rates affordable, why are they so opposed to a bill that would allow the federal government to review their annual increases?
The duality of Ignagni’s argument is also striking. During this segment and throughout the health care reform debate, insurers insisted that they support market reforms — some of these are the September 23rd provisions you’re hearing about, getting rid of lifetime limits, eliminating recessions, and discrimination against kids with pre-existing conditions. So long as the law required everyone to purchase private health insurance coverage, they were on board. The mandate we got may not be as robust as insurers would have liked, but any kind of requirement would have taken several years to implement. Knowing all this, insurers talked up their support for market reforms to publicly present themselves as favorable towards regulation and change. Now, they’re using those very same provisions to exaggerate their premium requests.
Interestingly, following the passage of reform, insurers promised to cooperate with the implementation process. “Health care reform is not over. This is the only the end of the beginning,” Mike Tuffin, executive VP of AHIP said in June. “Whether we like it or not, the bill was passed. Now we must be reliable and effective implementation partners. We need to stay engaged. ”