Should government get more power to block insurance hikes?

The new wrinkle in the health care debate is whether the government should get more power to block insurance rate hikes.

President Barack Obama said this week he wants to allow states and the federal government to screen and possibly block premium increases.

Here in Georgia, writes AJC reporter Craig Schneider, state Insurance Commissioner John Oxendine plans to submit legislation that would allow the insurance commissioner to reject rate hikes on individual policies.

Given the large increases that many policyholders are experiencing, do you think this is a good idea?

Will more government involvement distort the market, ending up creating other issues like shutting out some consumers?

Or is this what the doctor ordered, given the big rate hikes that are squeezing people?

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98 comments Add your comment

TnGelding

February 24th, 2010
7:46 am

Well, there usually are unintended consequences. I’d prefer eliminating the companies all together and have Medicare for all. You can’t expect a for-profit not to charge enough to make one. But we consumers need to be much smarter in using our health care dollars. And we need to take charge of our own health care. Politicians are bad about using health care and health insurance interchangeably. Our current health insurance system actually denies health care in some instances. And all of us need to stop participating in fraud and abuse, and report any we are aware of.

Buzz G

February 24th, 2010
8:35 am

That’s right. Keep driving the insurance companies out of business. Less competition will mean higher prices and will guarantee that our only option will be socialized medicine. Then we will have long wait times for every procedure, just like they do in Canada and England.

tc

February 24th, 2010
9:26 am

i wish a good team of cost accountants and efficiency experts would truly examine our system and then make recommendations. on the one hand it is amazing that profits are considered more important than the health of our citizens….many health insurance companies have morphed from not of profit to for profit, make that big profit. on the other hand, how can govt. with its history be trusted with providing an effective and efficient system? soon the govt monopoly gets lazy and the public is outraged by this burdensome structure. all i know is there are power hungry people on the left and money hungry people on the right.

Boo

February 24th, 2010
9:32 am

ABSOLUTELY! No question about it. We bail everybody out, then they turn around, make RECORD profits, and ream us! I’m SICK of it!

Neal Kelley

February 24th, 2010
9:33 am

And when Obama wanted to have a government option for healthcare.. we allowed the game of politics to play into our lives. We all derserve to die a shot life if we continue to allow public opionion to be minupulated by politicians that only care about if there party is gaining ground at the expense of the taxpayers life!!!

Ted

February 24th, 2010
9:34 am

Anything short of complete Tort Reform is just window dressing. It’s not the insurance companies that are making the rates go up, it’s the lawyers.

Doc Holliday

February 24th, 2010
9:40 am

People are looking for government to fix a problem that was caused by government intervention. Politicians for years have been stuffing their pockets with money from insurance companies so they will maintain laws that allow them specific grouping for higher rates. Our politicians allow insurance companies to place employees of smaller companies into small groups and rate them accordingly. When a person in the smaller group has a major health problem then everyone in that group faces a major rate increase due to he high percentage of claims based upon that “one” individual. Insurance companies should not be allowed to group small companies based on the number of employees that they have. This is your government at work and is a major part of this problem. Oh but our fine government will fix it for us won’t they? Hell NO!

TnGelding

February 24th, 2010
9:40 am

“Defensive medicine” only accounts for roughly 10% of costs at best. How much is your life worth?

” They found that liability reforms could reduce defensive medicine practices, leading to a 5 percent to 9 percent reduction in medical expenditures without any effect on mortality or medical complications.”

“Add to this the cost of defending malpractice cases, paying compensation, and covering additional administrative costs (a total of $29.4 billion). Thus, the average American family pays an additional $1,700 to $2,000 per year in healthcare costs simply to cover the costs of defensive medicine.”

http://www.aaos.org/news/aaosnow/nov08/managing7.asp

Mike

February 24th, 2010
9:46 am

Many of the insurance companies, hospitals, medical device companies and drug makers are publicly traded, so we can see all of their financials. Google has several ways of looking at these companies and their profit margins. Most insurance companies make under a 3% margin, which is nothing. Hospitals make 0% – 5% margin. Medical device makers make 5% – 10% margins (this includes GE). Drug companies make 10% – 30% margins. The insurance companies do not make much money. If you want to get angry at profits, look to Google, Apple, Microsoft and other companies like these who average 30% – 40% margins! A company needs to make some money to survive! If the insurance companies made no profit, your insurance cost would go down by about 3%!!! This is not the reason your insurance cost is going up!

dtboy

February 24th, 2010
9:49 am

We need tort reform and removal of government’s current hold on insurance companies, which stifles competition. This is a private industry, who’s in business to mitigate -your- potential health risk. The more of -your- health risk you want them to retain, the higher your premiums. If you wish to retain your own risk, then you don’t even need insurance companies. There’s no God-given “right” for someone else to take care of you, especially on their own dime.

JH

February 24th, 2010
9:52 am

@ Neal Kelley: So what your saying is that Obama should have just NOT listening the the overwhelming majority of public opinon??? THE People DO NOT want the government involved in their health care!!! The insurance companies have benn forced to raise their rates. I for one am SICK of the free ride that many have gotten that I have been forced to pay for.

As a spouse of an HR mgr, I know for a FACT that for many years too many people decided to gamble and do without healthcare benefits, and this is when it was affordable. Those same people would have rather spent that money on a new car etc.

Social programs don’t work. The goverment and others are through robbing me of money to pay for the problems of others. I do believe the People have spoken and will continue to speak loudly against anything remotely related with the word “socialized”.

Mr. Nobody

February 24th, 2010
9:54 am

The problem is that we have too many people wanting healthcare and getting healthcare for free as it is. I took my 4 month old son to the ER at children’s healthcare of Atlanta and saw first hand how people on welfare/Medicaid abuse the system. We were told to take him there by our physician and paid our $100 ER visit fee…only to wait in line behind losers who were bringing their kids up there for a “doctor’s visit” practically. Crap, this one mother brought her son up there (12:00 a.m.) and I watched him play his portable Playstation game system until he was called back only to learn that he had “pink-eye”…meanwhile there’s people waiting with REAL emergencies who PAY for their insurance having to wait behind these scumbags who get free emergency room visits (but can afford to buy their kid a $200 game system). I can only imagine what every other night is like up there. My point is, the whole time I thought to myself, “why don’t I just get on Medicaid so I won’t have to pay for my insurance?” Hell, why doesn’t everyone just be like the lady with the pink-eye kid and go to the ER for free? The answer is because if EVERYONE did this, who the crap would pay for everyone’s healthcare? Healthcare is expensive, yes I can agree. But the more people you have mooching the more it drives costs up for everyone who pay their part.

Kevin

February 24th, 2010
10:03 am

To TC at 9:26 am

I am a Controller in hospitals for the past 30 years. Even a non-profit entity has to make a small margin from it’s activity if for no other reason that to have funds available when emergencies arise.

To echo Mike, many hospitals do not have an operating margin and only post a total positive margin due to investment income. Most hospitals do not break even on Medicare nor Medicaid. If not for non-government insurance like Blue Cross and other non-government insurance payers, many hospitals and doctors would not have the cash flow to stay in business.

Doc Holliday

February 24th, 2010
10:14 am

UnitedHealth Group said yesterday that first-quarter earnings rose 41 percent from a year ago, driven by higher premiums and strong customer growth. They beat analysts’ expectations by 3 cents a share. Net income increased to $779 million, or $1.16 a share, compared with $554 million, or 88 cents a share, in the period a year ago. Revenue climbed 34 percent, to $10.89 billion, as premiums revenue grew to $9.87 billion, from $7.26 billion. Customer growth strengthened for UnitedHealth Group businesses in the first quarter, the company said. UnitedHealth, based in Minnetonka, Minn., also raised the company’s 2005 earnings outlook to $4.85 to $4.90 a share, up about 23 percent.

Mike- The above was cut & pasted from the NY Times. My insurer makes a lot more than 3% and I’m willing to bet that all Georgia insurers make much more profit than 3%, Our politicians guarantee that to them.

Doc Holliday

February 24th, 2010
10:25 am

Kevin- No doubt that our hospitals are taking a big hit due to our country’s lack of real government. We have a major immigration/border problem that our politicians view as opportunity for more votes so they choose not to address it. Along with that politicians know that if they give people these social programs and allow them to use your facilities at no cost for non-emergency visits then they will get more votes. No skin off their butts just job security from a blinded public. I must put some of the blame on the hospitals though as they do treat people for free even though their condition is not classified as an emergency (flu, colds, headache). You should police your business a little better.

Marcos

February 24th, 2010
10:29 am

The insurance companies drive up the cost of care then tell us that they need to raise their rates because health care costs are so high. This industry enjoys protection from our government leaders. Leaders who have their health care paid for by us while they are being feted by insurance industry lobbyists.

Does any of this make any sense to anyone? Other than the CEO gazilllionaires running this industry of course…

Pete

February 24th, 2010
10:35 am

The US is far and away the world leader in medical innovations. Do you think that will continue if it is changed to a not for profit run by the government system? Love how people expect others to pay for their healthcare.

The Truthier

February 24th, 2010
10:37 am

Oh really Pete?

This ranking of health care quality is from WHO (the World Health Organization):

1 France
2 Italy
3 San Marino
4 Andorra
5 Malta
6 Singapore
7 Spain
8 Oman
9 Austria
10 Japan
11 Norway
12 Portugal
13 Monaco
14 Greece
15 Iceland
16 Luxembourg
17 Netherlands
18 United Kingdom
19 Ireland
20 Switzerland
21 Belgium
22 Colombia
23 Sweden
24 Cyprus
25 Germany
26 Saudi Arabia
27 United Arab Emirates
28 Israel
29 Morocco
30 Canada
31 Finland
32 Australia
33 Chile
34 Denmark
35 Dominica
36 Costa Rica
37 United States of America
38 Slovenia
39 Cuba
40 Brunei

Pete

February 24th, 2010
10:39 am

Please go to college and get an education. Medical Innovations and the WHO rankings are two seperate things. My goodness the copy and paste. Please google medical innovations and educate yourself. Then educate yourself on how the WHO comes to those rankings. they include things like car accidents, suicides and murder in the avrage life expectency. Do those things have anything to do with healthcare?

Doc Holliday

February 24th, 2010
10:39 am

Marcos- Right on! The government fools you into thinking they are the answer and they are a large part of the problem. Rigid accountability is the answer.

oldtimer

February 24th, 2010
10:40 am

United health care posted a 4% NET profit…that is after expenses. That is very little. The average company only posted 2-4.5% profit..NET profit that is. People must learn not to look at total profit. Out of the total expenses MUST be paid. Included in that are the medical bills for people who have purchased the insurance. This is from the business pages of AJC, The Tennessean, WSJ among others.

Roekest

February 24th, 2010
10:44 am

Even in a free market, some regulation is needed to keep the bandits from taking over the stagecoach. Some needs to ride shotgun. Regulate the insurance companies, but don’t ever tell me I HAVE to buy this insurance or that.

Jimbo24

February 24th, 2010
10:45 am

Keep the government out of regulating insurance company premiums. They have no knowledge of how the premiums are determimed or what is adequate or excessive in their calculation. Regulation should be left up to the states.

BigTickles

February 24th, 2010
10:45 am

@JH: “So what your saying is that Obama should have just NOT listening the the overwhelming majority of public opinon??? ”

What overwhelming majority? Oh I get it…the majority of the FAUX News watchers.

So now I am confused..do we want medicare or we don’t? Because we know that it is a government program. Also, lets get rid of social security while we are at it because it is ran by the government.

Now what shall we tell the people whose insurance rates are going up by the double digits … which is exactly the point Obama is trying to make? Let’s just wait until the Party of No presents its plan. Oh wait, I forgot, it does not have a plan because everything it suggested to Obama is ALREADY in the current plan..d’oh’

http://voices.washingtonpost.com/ezra-klein/2010/02/five_compronises_in_health_car.html

Pete

February 24th, 2010
10:50 am

You can also tell how much of a nutcase someone is when they refer to Fox News as Faux news. That is laughable. I do not watch Fox, but it is as much news as CNN(where my wife worked for 6 years), ABC, MSNBC, or any of the others. Grow up and debate

UGAclassof 2004

February 24th, 2010
10:51 am

“UnitedHealth Group said yesterday that first-quarter earnings rose 41 percent from a year ago, driven by higher premiums and strong customer growth. They beat analysts’ expectations by 3 cents a share. Net income increased to $779 million, or $1.16 a share, compared with $554 million, or 88 cents a share, in the period a year ago. Revenue climbed 34 percent, to $10.89 billion, as premiums revenue grew to $9.87 billion, from $7.26 billion. Customer growth strengthened for UnitedHealth Group businesses in the first quarter, the company said. UnitedHealth, based in Minnetonka, Minn., also raised the company’s 2005 earnings outlook to $4.85 to $4.90 a share, up about 23 percent.”

Mike,

Insurance companies= Crooked. Every single one of them. Let’s trust FOR PROFIT COMPANIES to have the American people’s backs. Sounds like a great idea!!! Yeah right, give me a break!

Pete

February 24th, 2010
10:55 am

I say we trust a government that is trillions in debt and has shown they cannot run any system to have our back. SS is almost bankrupt, Walter Reed hospital is terrible and you want them to control healthcare. You are as laughable as the Government. Not just Obama, but Bush before him and all the others.

MikeMidtown

February 24th, 2010
10:57 am

Actually, each state’s department of insurance is supposed to approve and oversee increases for commercial and individual health insurance policies. Shame on the state for not doing a better job.

Greg

February 24th, 2010
10:59 am

@Jimbo24..”Keep the government out of regulating insurance company premiums” Really….then explain to us why the profits keep growing and we keep paying more for HC. It seems that WE THE PEOPLE are just making the Ins. Companies richer and WE THE PEOPLE poorer for less care and more out of pocket expense.

The system needs an overhaul. Also, Medicine should never been made into traded entity. Everyone deserves good affordable HC.

Pete

February 24th, 2010
11:01 am

Everyone does not deserve good affordable healthcare, are you crazy? They made 4% profit, stop looking at total profit and look at profit margin and percent. Hate to be rude, but some of you have zero business sense.

The Truthier

February 24th, 2010
11:01 am

As long as you are happy being down there with Slovenia Pete… you just keep telling yourself that. But do tell me how the health care industry can spend up to $94.3 billion (that’s a 2003 est. so it might be higher now) and yet we rank 37th in care? What matters more to you? Innovative ideas you will never be able to afford or being able to provide your family with health insurance?

And your snarky comments about education do nothing to support your argument, but go a long way in exposing the sort of person you truly are.

Pete

February 24th, 2010
11:06 am

I see you cannot do the work and figure out how the WHO comes to those bogus conclusions. As far as not being able to afford the innovative care unless you are rich. I had a neck injury 7 months ago and have been to 5 specialist around the US and have paid a total of $100. It seems as though you want others to pay for things that you feel like you are entitled to. If you had actually done any research and not listened to the bs media you would realize about 20 million people make over 50K a year but choose not to have health insurance. You see, Americans would much rather have 2 new cars, cable, multiple laptops, multiple HD TVs, a large house payment instead of paying for healthcare. I will educate you over time, just be patient

God Bless America

February 24th, 2010
11:09 am

You’re right Pete,

Government doesn’t care about us any more than the insurance companies, thus proving that Americans really don’t have a choice when it comes to things that really matter in this country.SS is done, Retirement will be next, and Me thinks America is finished as well. Civilizations crumble when the elite prosper at the expense of the working class. Rome is burning my friends!

The Truthier

February 24th, 2010
11:10 am

Where DO you get your facts Pete? Seriously. By the sounds of it we are all taking the poor insurance companies for a ride! So explain this from the article attached to this blog:

“Sabbeth’s policy — with a $10,000 deductible — was with Blue Cross/Blue Shield of Georgia. He had been paying $241.99 a month. The company’s letter told him that the new rate would be $415.40 a month, a one-shot increase of 71.6 percent.”

You think the hard working people of this country deserve to be treated like this? You think we should sink our entire paycheck into health care?

Let me guess… you work in the insurance industry. That is the only way to explain your thick-headedness.

Pete

February 24th, 2010
11:16 am

No, I do not work for the insurance industry. Number 1, I know how business works and do not rely on the news to give me my facts. Number 2, I have looked into how the WHO gets their rankings and it is a complete farce. I ask again, should car accidents, suicide, and murders count in life expectency ranking? What does that have to do with healthcare? Nothing. I will agree that something needs to be done to the health insurance industry, but allowing the government to run it is not the answer. I will ask you again, has the government shown an ability to run or manage systems? SS, Medicare, Walter Reed, how are all those working?

LoveTruthier

February 24th, 2010
11:18 am

Okay, I’m sold. Let’s go with France’s healthcare system. If they are number 1, and we are number 37, they must be doing something right. God knows we aren’t.

Pete

February 24th, 2010
11:20 am

That’s because the French share Americans’ distaste for restrictions on patient choice and they insist on autonomous private practitioners rather than a British-style national health service, which the French dismiss as “socialized medicine.” Virtually all physicians in France participate in the nation’s public health insurance, Sécurité Sociale.

Their freedoms of diagnosis and therapy are protected in ways that would make their managed-care-controlled US counterparts envious. However, the average American physician earns more than five times the average US wage while the average French physician makes only about two times the average earnings of his or her compatriots. But the lower income of French physicians is allayed by two factors. Practice liability is greatly diminished by a tort-averse legal system, and medical schools, although extremely competitive to enter, are tuition-free. Thus, French physicians enter their careers with little if any debt and pay much lower malpractice insurance premiums.

Nor do France’s doctors face the high nonmedical personnel payroll expenses that burden American physicians. Sécurité Sociale has created a standardized and speedy system for physician billing and patient reimbursement using electronic funds.

It’s not uncommon to visit a French medical office and see no nonmedical personnel. What a concept. No back office army of billing specialists who do daily battle with insurers’ arcane and constantly changing rules of payment.

Moreover, in contrast to Canada and Britain, there are no waiting lists for elective procedures and patients need not seek pre-authorizations. In other words, like in the United States, “rationing” is not a word that leaves the lips of hopeful politicians. How might the French case inform the US debate over healthcare reform?

LoveTruthier

February 24th, 2010
11:22 am

Oh, and Pete, please educate yourself. Your spelling and grammar are atrocious.

The Truthier

February 24th, 2010
11:22 am

Who is asking the government to run health care? I don’t think a public OPTION suggests a government take over. Surely you would keep your fancy insurance plan that allows you to only pay $100 for surgery. No one is asking you to give that up. We are just asking that there be an option for people not quit as wealthy as you appear to be. Hard working Americans who aren’t asking for a handout, just a fair shake to not die because they are not rich.

I used to consider myself a very pro-business conservative, but after seeing the way business treats people I have to question the intelligence of that position. There is NO respect for the American worker any longer. The country has devolved into an “I got mine so screw you” mentality and you, Pete, represent that perfectly.

Seriously

February 24th, 2010
11:25 am

Hey Truthier, Let me ask you this. Who helps BCBS when it turns out one of their clients has an aggressive stage 3 or 4 Cancer that is using extremely expensive experimental medical treatments at a cost near $40,000 a month. The insurance company is eating 80% of that to keep this person alive for years. This person has not contributed nearly that much to the pool of money this insurance company has. In addition, the investments BCBS depends on to increase the returns on the money they take in is decreasing with the slower economy. So yes, your premiums will go up. The only other solution is for them to offer less care and less availability, but that is what Obama care is all about. Better for everyone to have some bad healthcare. Certain things in live are previliges not rights. You want good stuff you pay for it. Enjoy socialism.

Pete

February 24th, 2010
11:25 am

I love how you did not answer a single question that I ask. I answered evrything you have ask me. You seem like you are ignoring things you cannot answer. How much a month would you be willing to pay for health insurance?

Pete

February 24th, 2010
11:26 am

lovetruthier, I have a degree from UGA and we can compare our educations anytime you like.

Clear Thinking . . .

February 24th, 2010
11:28 am

Hey @ “The Truthier”

This person who just had the 71.6% increase just turned 60. That is a huge health insurance coverage milestone. EVERYONE has to realize that healthcare is and should be a for profit business regardless of who runs it. If the Gove runs it it will surely lose money b/c the Gov can’t seem to run anything well . . .

The 60 year old just reached an age that historically has numerous and expensive claims so why would you expect the premiums to remain the same. If you were a bad driver say a male from 18-24 you will get charged higher premiums and as an older person with considerably more health risks you will have higher premiums! AND LET’S REMEMBER HEALTH CARE IS NOT A RIGHT . . . you should take care of yourself and pay for your healthcare!

Franklin

February 24th, 2010
11:29 am

I feel sad to call this my home state. These comments were fed to you by Fox News.

Boo

February 24th, 2010
11:29 am

Pete, You’ve been watching too much FOX News!

Pete

February 24th, 2010
11:32 am

I never ever watch Fox news. So there goes that theory. The thing is, you guys blame Fox news, but do not understand you are getting feed the other side by ABC, CNN, MSNBC and others. Do the reseacrh yourself and I think you will come to the same conclusion that I did.

Mr. Nobody

February 24th, 2010
11:32 am

Franklin, I feel sad that you live in my home state…keep tuning in to CNN, MSNBC, ABC and CBS

Pete

February 24th, 2010
11:33 am

Franklin, all you have to do is move to another state. You can move to any state that you feel has the same ideas that you do.

Larry

February 24th, 2010
11:35 am

Insurance company PROFITS are up over 250% in the last ten years! Not costs, not expenses, not payouts- PROFITS!!! Corporate greed is the only reason. This will continue until they have some real competition and federal regulation.

RJ

February 24th, 2010
11:37 am

@Mr Nobody – you are actually making a great argument for public healthcare. If those “losers” as you called them were actually covered w/ real health insurance, they wouldn’t be clogging up the emergency rooms w/ illnesses that should be treated by a primary care physician. Ponder that.