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Obama Warns Insurers About Premium Hikes

Yesterday President Obama had a little sit down with the chief execs of more than a dozen major insurance companies. The president is concerned, and rightly so, given the track record of some of these companies, that they will use the new health care reform legislation as an excuse to substantially raise their premiums.

The cost would be a factor most any time, but the recession is proving more stubborn than the administration hoped. With new home purchases down 33% and employment figures temporarily inflated by the census jobs, the hard truth is that not that much progress has really been made. (And now the Gulf Coast may be facing unique economic challenges directly related to the oil spill.) Now is not the time to put more people at risk by pricing insurance — and thus medical care — completely out of their reach.

After the meeting, Obama said, “There are genuine cost drivers that are not caused by insurance companies. But what is also true is that we’ve got to make sure this new law is not being used as an excuse to simply drive up costs. The CEOs here today need to know that they’re going to be required to justify unreasonable premium increases.”

On the other side of the table, the insurance leaders tried to make a case that industry greed is not at fault here, but rather that medical and drug costs are the real culprits. Karen Ignagni, president of America’s Health Insurance Plans, a trade association, termed the encounter with the President “very constructive.”

The good news is that some discriminatory practices are now off the table — like revoking coverage for sick members of insurance plans who made unintentional mistakes on their applications or the imposition of lifetime coverage limits. Approximately 100 million Americans are currently forced to deal with such limits to the detriment of their health and finances.

The long-term goal is for the insurance picture in America to get better for all concerned. In the short term, however, the fear the insurers will make up their new costs where they’ve always made them up, in the pocketbooks of the policy holders, is real and considerable.

No reform is ever enacted without suffering and sacrifice for someone. Let’s just hope the Obama administration is prepared to accept its oversight role and protect the people who have already been suffering and sacrificing while fighting tooth and nail to lower their health care costs.

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