Tuesday, February 9, 2010

Ms. Sebelius and Wellpoint's Rate Increases: Doesn't HHS Have Enough to Worry About?

Egads, doesn't Ms. Sebelius have enough to worry about?

Our HHS Secretary faxed a letter to California-based Anthem Blue Cross, expressing how 'disturbed' she was by 'unaffordable' rate increases 'as much as 39%' in the face of 'soar'ing $2.7 billion profits. She calls for greater transparency on the ratio of medical vs. overhead costs and urges Anthem to 'cooperate fully' with California's Insurance Commissioner, because [gulp!] she will be 'closely monitoring the situation.'

While the Disease Management Care Blog appreciates this latest example of perma-campaign mode political grandstanding, it would like to remind the HHS leadership that there is no national health insurance comissioner with jurisdication over state regulated plans. Ms. Sebelius' considerable administrative and political skills would be better spent addressing the government's 10.4% trend rate, relentless growth to the point of accounting for 50% of all health care costs, a budget increase in 2011 in excess of $80 million with close to 3000 additional FTEs, not having anyone at the helm at CMS, and a looming deficit that has perilous national security implications.

The DMCB hopes that Ms. Sebelius' puffery wasn't completely orchestrated by the White House's Four Horsmen and that she actually took the took the time to personally look at Wellpoint's 2009 financials. If she did, she'd know the company lost 1.4 milion members, mostly from its small group business. Operating revenue went down compared to 2008, the cost trend was high at 8.9% thanks to rising provider costs and investment income was lower. The DMCB suspects it all adds up to a toxic brew of premium increases due to a combination of higher medical costs and unfavorable underwriting: in the current economy, healthy persons that can do without insurance drop it, leaving behind relatively more sick persons with high health care costs. The DMCB wonders why no one has pointed out that a rate increase was the responsible thing to do in the face of relentless health system cost increases - unless, of course, you're willing to trample on State's rights, fudge entitlements, print money and borrow from the Chinese.

Ms. Sebelius can fuss all she wants. The there are only so many premium dollars to cover the cost, the State of California is in charge, and the Obama Administration's time would be better spent on dealing with bigger problems that it can actually do something about.

Current and future Medicare beneficiaries deserve better.



For an update on how things can snowball (no pun intended for those of us living in the Mid-Atlantic), check out the investigative spleen venting in the Health Access WeBlog. The veteran Bob Laszewski has more middle-of-the-road perspective here at the Health Care Policy and Marketplace Review Blog.

The DMCB is going to double down and predict that, once the news cycle moves on, Anthem will quietly provide all its pricing information to all the various Committee Chairs, Senators, Commissioners, Commissars and Potentates. After a requisite amount of nit-picking and face-saving adjustments, the bulk of the premium increases will stand. That's because, in this particular instance, health care inflation and the political process are the real problems, not the health insurance industry.

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