The Obama administration released a report on Thursday criticizing the recent proposed increases in health insurance premiums by Anthem Blue Cross, which will affect Californians, and other health insurance companies that are waiting for approval of their proposed hikes.
The report, published by the Department of Health and Human Services, says these proposed increases show the importance to act faster on health insurance reform and stop these companies from keep raising their premiums which.
“Without reform, these increases will continue, and the federal government and most states don't have the legal authority to block or reduce health insurance rate increases,” the report says.
Here is the report’s complete transcript (we have highlighted some interesting data):
"Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System
Introduction
"Recently, Anthem Blue Cross of California, an insurance company owned by the for-profit company WellPoint, Incorporated, announced that its individual market premiums would rise by as much as 39 percent in the coming months. This shocking increase isn’t unique. Across the country, families have seen their premiums skyrocket in recent years, and experts predict these increases will continue. Sandy Praeger, a leader of the National Association of Insurance Commissioners, predicts that we will "see rate increases of 20, 25, 30 percent.”
"These massive increases are disturbing examples of the problems that make reforming our health insurance system more important than ever.
Premiums Rise, Insurance Industry Profits Increase, Health Care Costs Cripple Working Families
"Anthem Blue Cross of California announced that its individual market premiums would rise by as much as 39 percent in the coming months. After Secretary Sebelius and state officials asked for a public justification for these increases, Anthem Blue Cross delayed raising its rates for two months.
"Anthem Blue Cross isn’t alone in insisting on premium hikes. Anthem of Connecticut requested an increase of 24 percent last year, which was rejected by the state. Anthem in Maine had an 18.5-percent premium increase rejected by the state last year as being “excessive and unfairly discriminatory” – but is now requesting a 23-percent increase this year.
"In 2009, Blue Cross/Blue Shield of Michigan requested approval for premium increases of 56 percent for plans sold on the individual market. Regency Blue Cross Blue Shield of Oregon requested a 20-percent premium increase. UnitedHealth, Tufts, and Blue Cross requested 13- to 16-percent rate increases in Rhode Island. And rates for some individual health plans in Washington increased by up to 40 percent until Washington State imposed stiffer premium regulations.
"Leading experts have predicted that, without reform, these increases will continue, and the federal government and most states don't have the legal authority to block or reduce health insurance rate increases.
"WellPoint and others claim that the premium increases are necessary given the rise in health care costs. While rising health care costs is a known problem with our broken health care system, some of the premium increases requested by insurance companies are 5 to 10 times larger than the growth rate in national health expenditures. All the while, insurance companies and their CEOs continue to thrive.
"Recent economic data show that profits for the ten largest insurance companies increased 250 percent between 2000 and 2009, ten times faster than inflation. Last year, as working families struggled with rising health care costs and a recession, the five largest health insurance companies – WellPoint, UnitedHealth Group, Cigna, Aetna, and Humana – took in combined profits of $12.2 billion, up 56 percent over 2008.These health insurance companies’ profits grew even as nominal GDP decreased by 1 percent over this same time period. WellPoint accumulated more than $2.7 billion in profits in the most recent quarter alone.
"And recent data show that the CEOs of America’s five largest insurers were each compensated up to $24 million in 2008.
"Now, while insurance companies enjoy increasing profits and CEOs take in millions, American families struggle to find and maintain affordable, quality insurance coverage
