President Barack Obama and Health and Human Services Secretary Kathleen Sebelius had some tough words and new rules for insurance companies Tuesday following a White House meeting with insurance executives and state insurance commissioners.
Obama warned the insurance executives against using health reform as an excuse to hike premiums. There would be no excuses for excessive rate hikes, he said.
In a call with reporters, Sebelius, who was formerly insurance commissioner in Kansas, also emphasized rate issues and said she would call on insurance commissioners to investigate suspicious premium increases. She said the federal government would be monitoring those increases.
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 a White House roster as attending the meeting with Obama, Sebelius and other White House officials.
Obama announced several new regulations stemming from the health reform law. The so-called "Patients Bill of Rights," which will take effect Sept. 23:
- Bans insurers from denying coverage for children with pre-existing medical conditions (Insurers will be prohibited from denying adults coverage based on a preexisting condition beginning Jan. 1, 2014).
- Bans insurers from rescission, which dumps people out of plans because of an unintentional mistake on an application for coverage.
- Bans insurers from setting lifetime limits on coverage and restricts their use of annual limits on benefits.
- Protects a choice of doctors. Women will have access to an OB/GYN without having to get a prior approved visit.
- Stops insurance companies from additional charges if someone has to access an emergency room out of network.
"Those practices will come to an end right now," Sebelius said.
She said the cumulative impact on insurance companies would be less than 1 percent.
"Part of the meeting today was to call on insurance companies to use their marketing strategies to put people in larger pools," she said.
"We don't want companies to go out of business," she said. "We know that insurance companies have to remain solvent, but we also think consumers absolutely should have a fair deal and that they should not be paying excessive rates based on CEO salaries and advertising costs and commissions to agents – things that don't end up adding to somebody's well-being."
"Underlying healthcare costs and current economic conditions are driving increases in health insurance premiums," Blue Cross Blue Shield Association CEO Scott Serota said in a statement posted on the oraganization's Web site. "We have a range of initiatives underway to rein in costs and improve quality, and we know more needs to be done to address rising hospital, prescription drug and other costs. With respect to the new insurance reform rules that become effective this year, these rules have the potential to add costs to what we're already experiencing today. The magnitude of these increases will depend on the specifics of the rules."