The Force Isn't With Them

Health insurance company CEOs were summoned to the White House today to talk about why they’re increasing premiums so much.

Considering how much President Barack Obama has demonized insurers during the debate over health care reform, it’s as if Luke Skywalker invited Darth Vader over for a chat.

Obama made a brief appearance at the meeting, but Health and Human Services Secretary Kathleen Sebelius ran the show. Sebelius, a former insurance commissioner—as well as governor—in Kansas, challenged insurers to post their requests for rate hikes online, along with data justifying them.

“Put it on a website, tell us what your loss trends are, tell us what you’re paying out, tell us what you’re spending in overhead, CEO salaries, and advertising,” Sebelius told reporters after the meeting.

Insurers didn’t make any commitments to follow up on Sebelius’ suggestion, but they did welcome more transparency as to the factors that are driving up premiums. They’re working with the National Association of Insurance Commissioners on an initiative to do just that, said Angela Braly, CEO of Wellpoint Inc., one of the insurers at the meeting.

Insurance premiums are skyrocketing not because of greedy insurance companies, but because of rising health care costs, insurers argue.

“We’re often in the position of being the bearer of bad news, in the form of rate increases,” Braly said after the meeting.

Profit margins for health insurance companies averaged only 2.2 percent last year, said Stephen Hemsley, president and CEO of UnitedHealth Group. That’s far below profit margins for other sectors of the health care industry, he said.

During the meeting, “there was a healthy exchange about that,” Hemsley said.

In order to drive down premiums, policymakers should look harder at payments to hospitals and doctors, and the cost of medical devices and drugs, according to insurers.

In other words, their message to the White House was: Don’t blame us; it’s the other guys who are greedy.

Insurers characterized their discussion with Sebelius and Obama as constructive. Most of the meeting was devoted to ideas about how to reduce health care costs, such as paying providers based on value versus volume, they said.

“We’re looking forward to continuing this dialogue,” Braly said.

The meeting was not “particularly focused” on the politics of health care reform, Hemsley said, “other than the venue and the timing of the event.”

The venue, of course, was the White House, and the timing was just as the final push for a health care reform bill begins. (The meeting also was held just after Anthem Blue Cross of California announced it was going to raise premiums by as much as 39 percent for customers in the individual insurance market, once again provoking outrage against insurers).

As a former insurance commissioner, Sebelius understands that such rate hikes aren’t due to insurance-company greed alone. But as a politician and loyal member of the Obama administration, she knows that beating up on insurance companies is good politics.

Most of us like our doctor, and we’re grateful for all the drugs that address all the maladies of modern life, from high blood pressure to performance problems in the bedroom. We’re usually happy with the care we receive when we have to go to the hospital. But we don’t like paying the true cost of all these services, so we accuse insurance companies of nickel-and-diming us to death.

That’s why insurance companies will continue to be the villains in health care reform, no matter how many constructive meetings they have with government officials.

The force isn’t with them.

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Kent Hoover is the Washington bureau chief for bizjournals.