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Obama Administration Urges States to Cut Health Insurers’ Requests for Big Rate Increases

EDITOR’S COMMENT: The Obama administration continues to try and mislead the American public on the high costs of Obamacare, in this case by putting pressure on the states and the insurance companies to ‘artificially’ lower their rates one more time. This disastrous program simply cannot stand on its own because of its built-in high cost structure.

By Robert Pear

Hoping to avoid another political uproar over the Affordable Care Act [1], the Obama administration is trying to persuade states to cut back big rate increases requested by many health insurance companies for 2016.

In calling for aggressive regulation of rates, federal officials are setting up a potential clash with insurers. Some carriers said they paid out more in claims than they collected in premiums last year, so they lost money on policies sold in the new public marketplaces. After finding that new customers were sicker than expected, some health plans have sought increases of 10 percent to 40 percent or more.

Administration officials have political and financial reasons for wanting to hold down premiums. Big rate increases could undermine public support for the health care law [2], provide ammunition to Republican critics of the measure and increase costs for some consumers and the federal government.

Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota, which requested rate increases averaging about 50 percent for 2016, said his company had not seen an improvement in the health status of new customers.

“Our claims experience has not slowed at all,” Mr. Keefer said. “The trend has gotten a little worse than we expected.”

Like other insurers, Blue Cross and Blue Shield of Minnesota reported a surge in prescription drug expenses. Two high-cost specialty drugs for rheumatoid arthritis, Enbrel and Humira, account for one-fourth of prescription drug costs in the company’s individual health plans, Mr. Keefer said. Other insurers reported high costs for hepatitis C medications.

State officials said their agencies had been reviewing insurance rates for decades and generally knew local market conditions better than federal officials.       (my emphasis) 

READ all of Robert Pear’s comments from The New York Times [3] here [3].

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