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Blue Cross avoids White House ire on insurance rates

http://66.225.205.104/JR20100309.mp3

The Obama Administration says health insurance companies need to do a better job of proving to the public that their rate hikes are justified. In its final push to pass health care overhaul, the White House has seized on outcry in some states like California where rates are going up more than 30 percent this year. But North Carolina's largest insurer has so far avoided White House pressure. Insurance companies say they are boosting rates to keep pace with the rising cost of medical care and an increase in expensive procedures being ordered by doctors. But Health and Human Services Secretary Kathleen Sebelius says if that's true, insurance companies should prove it - and post the proof on their websites. "The insurance numbers just don't match up with medical trend," said Sebelius on a conference call with reporters Monday afternoon. "That's why we need to get to the bottom of what they're spending in medical benefits and what they're actually pocketing in terms of profit." Sebelius sent a letter to the nation's largest health insurance companies - including Aetna, Cigna and United Health - asking them to post detailed justification for rate increases on their websites. But North Carolina's main health insurer, Blue Cross Blue Shield, did not receive one of those letters, even though the insurer made more than $100 million last year. Sibelius sent her letter only to for-profit companies. Blue Cross Blue Shield of North Carolina is not-for-profit. And it's also subject to a North Carolina law that partly does what Sebelius is asking, at least when insurance companies want to raise individual rates. "Each company makes its own filing and we as state regulators have to review the data and see if what they say is true and if it's supported by inflation or by the reasonable costs of medical care in a given area," says NC Insurance Commissioner Wayne Goodwin. Last year, the insurance department gave Blue Cross Blue Shield of North Carolina approval to raise individual policy premiums an average of about 12 percent. But Goodwin says there's a gap in North Carolina law that only requires insurance companies to get prior approval for rate increases on individual plans and not group or employer plans. State regulators can only step in for employer and group plan rate increases if enough people complain. Goodwin would like to see that law changed so that all health insurance rate hikes have to be approved beforehand.