Posted on | September 28, 2010 | No Comments
US Secretary, Health and Human Services
In the last two weeks, my department has been accused of “thuggery” (this editorial page) and “Soviet tyranny” (Newt Gingrich). What prompted these accusations? The fact that we told health-insurance companies that, as required by law, we will review large premium increases and identify those that are unreasonable.
There’s a long history of special interests using similar attacks to oppose change. In the mid-1960s, for example, some claimed Medicare would put our country on the path to socialism.
But what is really objectionable about these comments is not who they’re attacking, but what they’re defending. These critics seem to believe that any oversight of the insurance industry is too much, and that consumers would be better off in a system where they have few rights or protections.
Over the past decade, Americans have seen what happens when insurance companies have free rein. The cost of health insurance has more than doubled, while millions of hard-working Americans lost their coverage or drained their savings to keep up with premiums. Employers—big and small—have struggled mightily to absorb these cost increases and have been losing the fight.
As insurance commissioner and governor of Kansas, I saw firsthand how these rate hikes burdened people. I spoke with families who watched their insurance go up 20%, 30%, even 40% a year without explanation. I met with small business owners who had stopped offering health insurance to their employees because they couldn’t afford the annual double-digit premium increases.
A woman who wrote to me recently summed up the frustration that many feel. “As a self-employed, hard-working person,” she wrote, “I have no good options for health coverage.”
Yet even as our insurance markets have failed Americans time and time again, special interests successfully blocked reform.
That’s changing with enactment of the new health insurance law. Under the Affordable Care Act, 46 states have already received grants to beef up their premium-review and oversight capabilities. And additional funding is on the way.
The law also gives clear instructions to the new state-based health insurance marketplaces called exchanges that will be created in 2014. As the exchanges decide what plans to include, they must incorporate recommendations from states about whether particular health insurance issuers should be excluded based on a pattern of excessive or unjustified premium increases.
We are already seeing this new level of accountability pay off. Last week, North Carolina’s largest insurer announced a “one-time refund that will return $155.8 million to more than 215,000 individual Blue Cross Blue Shield customers as a result of the Affordable Care Act.” This rebate will put an average of $720 back into the pockets of each of those policyholders. In addition, thanks to diligent work by North Carolina’s insurance commissioner, they’ll see their premiums rise by less than 6% in 2011—the smallest rate increase in four years.
A day after Blue Cross Blue Shield’s announcement, seniors with private Medicare plans got some news that most Americans haven’t heard in years: Their premiums will actually go down 1% next year, even as many of them enjoy better benefits.
The Affordable Care Act is bringing some basic fairness to our health insurance market. So when I learned that a handful of insurers around the country are blaming their significant rate increases on the new law—even though the facts show that the impact of the law on premiums is small, just 1% to 2% declining over time—I let them know that we’d be closely reviewing their rate hikes.
It’s understandable that some insurance companies and their allies don’t welcome this change. They’ve made large profits from the status quo. And it’s not surprising—though still disappointing—that House Republicans have recently pledged to repeal the Affordable Care Act and get rid of these new consumer protections.
If critics really want to go back to the days when insurance companies ran wild with no accountability, they should have the courage to say so openly instead of hiding behind distracting attacks. In the meantime, we’re going to keep standing up for American families and small business owners who deserve a system that works for them.
Ms. Sebelius is the U.S. secretary of Health and Human Service