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Related Healthcare News: Biden Calls for More Oversight of Insurance Industry at NAIC Meeting

Posted on 22 Sep 2009

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Vice President Joe Biden stepped into a bigger role in the administration's push to revamp health care with a call for tougher regulation of the insurance industry.

Biden, in remarks to be delivered today to a conference of the National Association of Insurance Commissioners in suburban Washington, touted President Barack Obama’s proposals to give state regulators more power to hold down rate increases. He said health insurance rate increases are outpacing inflation and salaries.

“To state the obvious: This is simply unsustainable, for families, for businesses, for state budgets and for our national economy,” Biden said, according to excerpts of his remarks.

In advance of Biden’s speech, the Obama administration released an eight-page report citing a Kaiser Family Foundation study that says the cost of health-insurance premiums in states jumped between 88 percent and 145 percent in the past decade compared with increase of 28 percent in prices and 38 percent in wages over the same period.

“Having more systematic review at the state level is a critical tool” to holding down costs, Brian Deese, an Obama economic adviser, said in a conference call with reporters last night.

Increased Premiums

The administration’s report showed premiums increased by 100 percent or more in all but seven states in the last decade. Alaska had the biggest increase, 145 percent, and Michigan the lowest, 88 percent. The report didn’t cite specific reasons for the variation.

Biden said legislation overhauling health care should prevent companies from refusing to cover Americans with pre-existing conditions, should limit out-of-pocket expenses and shouldn’t require deductibles or co-pays for preventative care.

“These ground rules don’t pick and choose which companies they apply to. They apply to everyone,” Biden said in his prepared remarks. “The playing field is level. Every insurance company doing business in this country will have to play by these basic rules, and competition will remain healthy.”

The insurance industry, which includes such companies as UnitedHealth Group Inc. of Minnetonka, Minnesota, and WellPoint Inc. of Indianapolis, has been under fire from Obama and Democratic leaders in Congress.

Major Opposition

House SpeakerNancy Pelosi in August called insurers “the major opposition to reform,” and Obama’s secretary of health and human services, Kathleen Sebelius, wrote in a Washington Post opinion article that “the current health- care system gives insurance companies all the power.”

In response, Karen Ignagni, president of the insurers’ trade group, America’s Health Insurance Plans, criticized what she called an effort “to demonize health plans and the men and women who work hard every day in their communities to provide health insurance coverage to more than 200 million Americans.”

Deese said Obama isn’t declaring war on the insurance industry.

“His goal is not to demagogue the insurance industry,” Deese said. “But we have an unsustainable status quo.”