Congress Takes Aim at Insurer Profits
As Congress appears poised, as many on Capitol Hill have been saying lately, "on the verge of a historic moment" with healthcare care reform, it is also preparing to take on the insurance industry over costs and profits—no matter what happens with reform.
Just yesterday, House Speaker Nancy Pelosi (D-CA) in her weekly media briefing, called the announcement that insurer Cigna's profits during the third quarter jumped 92% this year to $329 million "stunning." "That's why we have to hold insurance companies accountable," she said.
She added that several provisions in the House bill (HR 3962) would attempt to address higher insurer profits. They include the amendment to overturn the decades-old McCarran-Ferguson Act addressing antitrust exemptions for the insurance industry and provisions to limit high charges by insurers. For instance, if an insurer's rates pass a designated point, that company would no longer have access to the states' health insurance exchanges.
Similarly, Sen. Thomas Harkin (D-IA), as chairman of the Health, Education, Labor, and Pensions (HELP) Committee, took on insurers on Wednesday concerning their price increases to small businesses. He said a recent survey of state insurance regulators by the National Association of Insurance Commissioners found that average insurance policies will increase between 11% to 16%—and as high as 25% to 30%—annually in most states.
At the hearing, he said, "I would have liked to question health insurance companies about these trends and practices. But not surprisingly, insurance companies are not interested in discussing them.
"Health insurance companies should open their books and explain to the American people why they support a health insurance market for small businesses that is so dysfunctional, and so lacking in transparency," he added.
In response to the insurers' reluctance to appear before the panel, Harkin announced "his own investigation into the pricing practices of health insurance companies that sell policies to small businesses."
He sent letters, with a response deadline of Nov. 17, to the heads of Humana, UnitedHealth Group, WellPoint, and Aetna asking them about how they determined insurance rates for businesses with 50 employees or fewer and medical loss ratios, which are the percentages of consumers' premium dollars that insurance companies spend on medical care.
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