While President Obama took his health reform to the American people this week, Health and Human Services Secretary Kathleen Sebelius sent an open letter to the CEOs of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc. asking them to publicly justify proposed health insurance premium increases. “If insurance companies are going to raise rates, the least they can do is tell us why,” she said.
Sebelius referred to a recent Goldman Sachs analyst report that upgraded most insurance company stocks because the industry has so little competition. Even if they raise their rates, existing customers won’t be able to find less-expensive options. And if the plans lose customers, premium increases will more than make up the loss.
“Not only is price competition down from year ago … but trend or (healthcare) inflation is also up and appears to be rising. The incumbent carriers seem more willing than ever to walk away from existing business resulting in some carrier changes,” Steve Lewis (of the employer benefit consulting firm Willis) stated in the Goldman Sachs report.
Something has to change.