By Kathleen Sebelius, Special to The Kansas City Star, February 19, 2010
Earlier this month, families opened their mail to another stark reminder of why we need to reform our broken health insurance system.
In California, beneficiaries of an insurance company owned by WellPoint received letters announcing that their premiums would rise as much as 39 percent, meaning a family paying $1,193 a month will now owe $5,580 more on its annual bill.
Even more infuriating for the people receiving these letters, this increase didn’t happen because WellPoint had fallen on hard times. WellPoint recently announced more than $2.7 billion in profits from the most recent quarter alone.
It’s outrageous that insurance companies are reaping huge profits on the backs of working families who are already struggling. It’s also all too familiar.
Even as a recent report showed that America’s five largest insurers made more than $12 billion in profits last year with their CEOs taking home up to $24 million each, some of those same companies have requested substantial premium increases. In the last year alone, insurance companies have requested premium increases of 56 percent in Michigan, 24 percent in Connecticut, 23 percent in Maine, 20 percent in Oregon and 16 percent in Rhode Island.
I wrote WellPoint executives a letter asking them to justify their extreme premium increases in California.
Their response showed us how out of touch they are with middle-class families. They argued that other insurers were making even bigger profits and that their consumers were free to choose a different policy. But families know that a choice between higher bills and weaker benefits is no choice at all. We deserve better.
I will continue to encourage insurance commissioners around the country to scrutinize and, when legally possible, rein in these exorbitant and unfair premium increases. After we spoke out, the California premium increase was delayed by two months, but delays and temporary relief are not enough. We need to fix the system that makes these kinds of actions possible.
Right now, our health insurance system works well for insurance companies. They can raise your premiums or slash your coverage, knowing it’s hard to find another plan. In most states, they can turn you away if you have a pre-existing condition such as high blood pressure. They can find an error in your paperwork and cancel your coverage when you get sick.
Meanwhile, families’ "choice" often is between one plan they can’t afford and another plan that offers threadbare coverage. That’s assuming families make it through all the fine print to find out what a plan actually covers. Too many Americans learn about their plan’s benefits when their doctor says, "We can do the operation we talked about, but your insurance company won’t cover it."
President Obama started working on health insurance reform early last year to put these families and their doctors and nurses back in charge of health care decisions. We’ve been driven by a few simple goals.
First, we need to slow the growth of rising health care costs for families, businesses and government, so that workers can start getting raises again, companies can start growing, and we can finally start bringing down the deficit.
Second, we need to strengthen insurance for the Americans who already have it. That means creating rules to stop insurance companies from putting an artificial cap on your benefits or canceling your policy when you get sick. Third, we need to make affordable coverage available to every American. Markets work, but only when there’s competition and real choices.
That’s why the president has invited Democrats and Republicans together for a televised meeting to share ideas about how we can finish the job with health insurance reform.
When Americans are getting 39 percent premium increases piled on top of all their other worries, we need every good idea we can get, no matter whom it comes from. But there’s no room for scoring political points or deliberate stalling.
The premium increases in California and across the country are a wakeup call. It’s time for Congress to pass reform and hand control over health care decisions back to American families and their doctors.
Kathleen Sebelius, former Kansas governor, is the secretary of the Department of Health and Human Services.
For more on this issue read, Sebelius Unveils New Report on Requested Premium Increases in States Across the Country and Greed Trophy up for Grabs.