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Sebelius Cautions Insurers on Rate Hikes

Janice Simmons, for HealthLeaders Media, September 13, 2010

Ignagni says that health insurance premiums were increasing for next year because of "soaring prices for medical services, the impact of younger and healthier people dropping their insurance during the weak economy, and additional benefits required under the new law."

The new healthcare reform law now requires that health insurance coverage include a wide range of new benefits "beyond what many families and small businesses previously purchased," Ignagni said. "It's a basic law of economics that additional benefits incur additional costs, and the impact on premiums depends on the type and amount of coverage policyholders had before."

She added that health plans, while incorporating new benefits, will be trying to keep “healthcare coverage as affordable as possible for families and employers.”

Any premium increases should be "moderated by out?of?pocket savings resulting from the law," Sebelius says. These savings include a reduction in the "hidden tax" on insured Americans that subsidizes care for the uninsured, she added.

By making sure insurance covers those most at risk, less uncompensated care will be anticipated and therefore "the amount of cost shifting to those who have coverage today will be reduced by up to $1 billion in 2013," Sebelius says.


Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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