Here's an occurrence that was far too common over the last few years: you open a letter from your insurance company, and it says your premiums are going up 25 or even 50 percent. There's no explanation why. There's nothing you can do. You either need to find thousands of dollars in your family's yearly budget or risk losing your health coverage.
Until now, insurers could get away with these exorbitant, unexplained premium hikes because the rules were stacked in their favor. They had all the information. They had limited competition. And in many states, there was little oversight or accountability.
The result was that even as insurers made record profits, far too many hard-working Americans saw their health insurance bills skyrocket out of reach. As one Florida small business owner whose premium had just gone up by more than 23 percent wrote to me: "I am near the breaking point. With guaranteed annual increases at 10 to 15 times inflation, eventually we will go out of business or be forced to cancel insurance. Either way, it's a lousy set of options."
Beginning today, help is on the way. Thanks to a provision in last year's health care law, insurers must submit a written justification every time they try to raise your premium by ten percent or more. As rate increases are proposed, that information will be posted in a clear, easy-to-understand format on the new consumer website Healthcare.gov.
Most importantly, these rates will also be evaluated by experts to see whether they're justified, and that information will be made available to consumers too.
As a former Kansas Insurance Commissioner, I've seen firsthand how this kind of transparency can benefit consumers. Insurers are much more likely to think twice about a double digit rate hike if they know their reasons will be made public.
That's especially true because Healthcare.gov also allows consumers to type in their zip code and, for the first time, see the prices and benefits for all available insurance options in one place. When you line up information about plans side by side, insurers suddenly become very reluctant to be the most expensive option.
Around the country, we have numerous examples of the power of greater transparency and scrutiny. In the last year alone, numerous states have exposed, blocked or reduced unjustified rate increases that would have devastated the finances of families and businesses.
When one of California's largest insurance companies tried to raise rates three times in the last year, for example, increasing some premiums by as much as 87 percent, the State Insurance Commissioner asked the company to justify its increases. The insurer backed down and withdrew the rates, saving families and small business owners millions of dollars. And we've seen similar results in states like Connecticut, Oregon, North Carolina, Rhode Island, and North Dakota.
To help states step up their efforts to keep insurers in line, our department is also providing them with $250 million under the law to hire new staff, enhance consumer protections, and conduct more thorough rate reviews. And we're encouraging them to make the most of the oversight powers they already have. As a result, according to a recent report from the Government Accountability Office, 41 states have already taken steps to strengthen their scrutiny of unreasonable rate hikes.
But you shouldn't have to live in a certain state to be protected from unjustified increases in your health insurance bills. That's why today's announcement is so important. It ensures that all Americans have the information and expert help to make sure insurers don't rip them off.
Of course, if we want to stabilize premiums in the long run, we'll also have to address the rising cost of care. That's why the health care law contains what 272 leading economists have called: "essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending." But given that many of the exorbitant health insurance rate hikes of the last decade far exceeded the underlying growth in health care costs, additional protections were needed.
Beginning today, the deck is no longer stacked in insurers' favor. The next time your insurance company tries to raise your premium by double digits, they'll have to explain themselves. And you'll have all the information you need to make the right decision for your family.
Correction: The ninth paragraph in this blog has been revised
http://pnhp.org/blog/2011/04/05/business-leaders-and-single-payer/
You just have to get off you butt and demand it
Hell, at some point we'll probably see a justification like: we've increased your premiums in order to pay for a new division of our company whose main job is to discover new reasons as to why we are increasing your premiums. Have a nice day!
Each time you promote all the benefits of the new health care act, would you kindly share what you are smoking?
Everything except single-payer, the only truly effective spending cutter.
Well, contrary to Republican myth, the private sector does not do a good job on health care. they strip off 25-35% of health care expenditures for their overhead and profits. Medicare strips off 10%.
Yes, only 10%.
So, there goes the meme: gov.t cost more than private sector competitive plans. Obviously, not true.
Also, there goes the meme: private sector is always more efficient than the public sector. Obviously not. We spend more per indiv. health care than other nations and have worse outcomes. Why? Because the health care dollars are going to Wall Street companies in the form of Health Care Insurance.
Ah, it's good to have the truthy, huh, Darren.
No doubt this will drastically change your perspective, and therefore also change your mind on the issue, right?
Huh?
Just eliminating the paper work and the staff to process it will save hundreds of billions.
Two, make it harder to claim the benefits you are entitled to by adding onerous pre-certification processes as well as other tricky denials for what you thought you had a right too. Whew...insurance minyans can now breath easy again. The mutant investment banks we call private insurers can still make tons of money at the expense of their members/consumers. You had me scared for a second
Secretary Sibelius. You are such a kidder!
Everywhere I go outside the US it's the same when the conversation turns to retirement. "Is my pension going to be enough?"
In the US that never comes up. It's always, "How will I pay for healthcare?"
Estimates of the healthcare costs, out of pocket, for every man or woman who retires in the US range from $200k to $400K.
At least 75% of people have no hope of saving that much money before they retire, let alone enough to live.
The above article is just thin gruel for the masses. Any accountant can come up with a justification for a 25% increase while on their coffee break.
By the way, my plan for healthcare when I'm retired? An open air ticket to France.
Still no caps, tho, right?
That little piece of paper with the reasons on it?
It doesn't help pay that increased premium, Ms Sebelius.
It still must be paid.
Means diddlysquat.
What we needed was single payer like the rest of the civilized world--what we got was further entrenched in the insurance trap.
Thanks so much!
Oh, boy! That's really gonna stop 'em! NOT
a nation that claims to be a christian nation and has 50 million americans without health insurance and wars for corp profits is anything but followers of the teachings of jesus. ie anything but.
you are trying to sell your half baked insurance thing to americans for obama votes in 2012. nice try wont work here.
obama admin as been a sell out to corp america and wall street so you have a tough sell for 2012. rich perry will help you sell your wares but many demos will stay at home and have lost interest in wash.
go to my friends house and try to sell him your half baked plan as he owes 200,000 because his insurance company found a loop hole in his paper work two months later even after they paid the hospital. ie he did not sign up for medicare quickly enough as he was fighting for his life in the hospital.
christian nation indeed. this nation is anything but christian in the sense of caring for its citizens. I find the atheists much more caring for others than the christians in gov support support programs.
My friend in the UK recently had a heart attack. They found blockage in two of his heart's arteries thus requiring a dual bypass. They put him on a list and he had to wait over a month before his surgery was performed.
Now, in my own case here in the US, I had a heart attack in Sep. of 2010. I had to have a quad bypass. My surgery was performed within two days.
My friend didn't pay a dime for his surgery. Mine cost me about $8000 and I had Blue Cross Blue Shield. Total bills were around $130k for my surgery and hospital care.
But my cost didn't end there. My surgery cost me my job. My fine employer terminated me 2 days after I got out of the hospital. Along with all of my insurances. And, yeah, I'm broke. My buddy in the UK, however, who makes much less than I at his job, still has his job but is broke too - simply because he doesn't make any money in the first place.
So what are you going to do? Either system saps everything you have. I am willing to give ObamaCare (if it must be called that) a chance.