March 7, 2010
A WARNING TO HEED.... Earlier this week, a highly regarded insurance broker painted a disconcerting picture -- a health insurance marketplace that features so much concentration and so many monopolies, insurers are "willing to raise prices and lose customers in an effort to improve their bottom line."
It was a warning Obama administration officials want policymakers to take seriously.
To bolster the case for a far-reaching overhaul of the health care system, the Obama administration is seizing on a new analysis by Goldman Sachs, the New York investment bank, recommending that investors buy shares in two big insurance companies, the UnitedHealth Group and Cigna, because insurance rates are up sharply and competition is down.
White House officials on Saturday said that the Goldman Sachs analysis would be a "centerpiece" of their closing argument in the push for major health care legislation. The president and Democratic Congressional leaders are hoping to win passage of the legislation before the Easter recess. Republicans remain fiercely opposed to the bill.
The Goldman Sachs analysis shows that while insurers can be aggressive in raising prices, they also walk away from clients because competition in the industry is so weak, the White House said. And officials will point to a finding that rate increases ran as high as 50 percent, with most in "the low- to mid-teens" -- far higher than overall inflation.
The analysis could be a powerful weapon for the White House because it offers evidence that an overhaul of the health care system is needed not only to help cover the millions of uninsured but to prevent soaring health care expenses from undermining the coverage that the majority of Americans already have through employers.
As a friend of mine noted the other day, "Those who oppose health care reform because they like their coverage have it backwards."
Expect to hear quite a bit more about this, especially when HHS Secretary Kathleen Sebilius appears on the Sunday shows this morning.
—Steve Benen 9:05 AM
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I thought that was an excellent Saturday address on the healthcare issue. President Obama is hitting on all cylinders. I also like the fact that he keeps pointing out that all Americans should have the same benefits that members of congress have. Who could argue with that? I don't think he pushed that enough during the madness of 2009. But it's a good part of the closing argument.
Posted by: Ladyhawke on March 7, 2010 at 9:12 AM | PERMALINK
"And officials will point to a finding that rate increases ran as high as 50 percent, with most in "the low- to mid-teens" -- far higher than overall inflation."
Under private insurance, yes, but under "gov't run healthcare (aka medicare)" not so. Being one who receives yearly COLA's in my pension and not drawing SS, I have seen a steady drop in net the past 3 years due to health insurance premium increases. I think I am not alone, yet why doesn't everyone, including those who work who have health insurance, notice any difference, including republicans?
Posted by: Dave on March 7, 2010 at 9:52 AM | PERMALINK
Insurance is NOT healthcare. Insurance companies make money the LESS healthcare people use. Their whole incentive structure is to minimize access.
Posted by: Thorin-1 on March 7, 2010 at 10:48 AM | PERMALINK
A strong public option would make all this nonsense go away DAMNIT!!!! Just saying......
Posted by: Chopin on March 7, 2010 at 10:57 AM | PERMALINK
http://www.huffingtonpost.com/2009/12/04/aetna-forcing-600000-plus_n_380130.html
Aetna openly boasted about this in a third quarter earnings call, which got broken in coverage at HuffPo and elsewhere early in Dec.
"Health insurance giant Aetna is planning to force up to 650,000 clients to drop their coverage next year as it seeks to raise additional revenue to meet profit expectations.
In a third-quarter earnings conference call in late October, officials at Aetna announced that in an effort to improve on a less-than-anticipated profit margin in 2009, they would be raising prices on their consumers in 2010. The insurance giant predicted that the company would subsequently lose between 300,000 and 350,000 members next year from its national account as well as another 300,000 from smaller group accounts.
"The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering," said chairman and CEO Ron Williams. "We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. Our pricing actions should have a noticeable effect beginning in the first quarter of 2010, with additional financial impact realized during the remaining three quarters of the year."
Posted by: Bruce Webb on March 7, 2010 at 11:03 AM | PERMALINK
And isn't that all the more reason, the pseudo-Democratic plan to require almost everyone to buy from this den of vipers is all the worse to leave as it is?! We absolutely must, must have some vigorous public option plan with teeth. If not, there must be one Hell of a worthwhile regulatory framework in its place (which of course is forever subject to being weakened, unlike a literal institution - like Medicare - that is hard to unplug.)
And also, we don't need flabby centricizers puttering about how it wouldn't save that much money overall, isn't a big deal, etc. Really, if you are a "Democrat" can you really get on board with a forced private market like that? There should be some things more important than Party loyalty.
Posted by: Neil B on March 7, 2010 at 11:07 AM | PERMALINK
When all the dumped people are forced back into the private system by mandates, won't the INSCOS demand and receive extra compensation for taking on this 'new' burden?
Posted by: Michael7843853 on March 7, 2010 at 11:37 AM | PERMALINK
“Earlier this week, a highly regarded insurance broker painted a disconcerting picture -- a health insurance marketplace that features so much concentration and so many monopolies, insurers are ‘willing to raise prices and lose customers in an effort to improve their bottom line’.”
As they moved to no competition for health insurance corporations by dropping the Public Option, as they increased the penalties for those who don’t purchase the mandated policies, as they adopted the tax on Middle-class policies instead of the surtax on millionaires, and as there are less consumer protections and regulations, each and every time the price of the stock of the health insurance corporations keeps going higher.
Posted by: Joe Friday on March 7, 2010 at 11:47 AM | PERMALINK
And the administration's health care plan will prevent insurers from raising their rates exactly how? This isn't a rhetorical question.
Posted by: Bloix on March 7, 2010 at 5:34 PM | PERMALINK
I loved my Blue Cross $2500 deductable Individual health insurance in 1996 when my premiums were $75/mo, but now since my premium have increased to 953/mo, I do not. The older you get the more they charge.
Posted by: buddie on March 8, 2010 at 11:10 AM | PERMALINK