The health insurance monopoly has become so concentrated in some areas that insurers can now jack up rates as high as they want – even if it means losing customers – and still continue to drive profits even higher.
Wall Street broker Steve Lewis told investors during a conference call organized by Goldman Sachs last week:
“Not only is price competition down from a year ago… but trend or (healthcare) inflation is also up and appears to be rising. The incumbent carriers seem more willing than ever to walk away from existing business resulting in some carrier changes…”
He went on to say that rate increases could go up as high as 50 percent in some areas, adding: “I think most people would acknowledge that there’s a need for healthcare reform.”
Sec. of Health and Human Services Kathleen Sebelious released a letter to insurance executives last week asking them to post justifications for rate increases on their websites.
But Talking Points Memo reported that AHIP CEO Karen Ignagni said Tuesday that criticizing the insurance industry for jacking up rates would not improve the situation.
“Our industry strongly supports health care reform because we recognize that the current system is unsustainable,” Ignagni said. “The current debate about rising premiums has demonstrated that, in fact, we have a health care cost crisis in this country. Unfortunately, the path that has been followed is one of vilification rather than problem solving.”
The proposed healthcare reform bill gives the government the authority to limit excessive premium increases. The provision was added after Wellpoint, a massive California insurance company, jacked up its rates by 39 percent.
Health Care for America released this new ad (below) in the wake of recent insurance rate hikes.