News & Updates


Biden Tells NAIC Health Care Reform Won’t Hurt Insurers


Published 9/22/2009 
NU Online News Service, Sept. 22, 4:16 p.m. EDT

Vice President Joe Biden told a meeting of insurance regulators that health care reform can be accomplished without harm to the health insurance industry.

Speaking at the Fall meeting of the National Association of Insurance Commissioners he said that proposals to reform health care will not impact health insurers’ ability to compete and make money. “I want insurance companies to make money,” he said.

“But I also want them held accountable,” he stated.

Mr. Biden told his audience that the trajectory of health care costs needs to be changed through reforms or else rising health care costs will cripple businesses and the federal budget.

And Mr. Biden said that the nation has never been closer to achieving true health care reform

The vice president pointed to health insurance premiums that he said have gone up between 90 to 150 percent in the last decade as gaps between premium increases and wages are expanding.

In Florida, for example, he said, health care rates have increased 121 percent while wages have risen 43 percent, he explained. Michigan, the state with the smallest gap, still has a 37 percent gap between premium and wage increases, according to the vice president.

This past year, he explained, premiums have increased 5.5 percent even with inflation falling 7 percent.

The current health care system, said Mr. Biden, is affecting America’s businesses’ ability to compete internationally.

Regarding the health care system today, the vice president said, “This is simply an unsustainable position.”

Vice President Biden said he would like to see certain “basic ground rules” for health care reform as follows:

• No discrimination for preexisting conditions.

• No exorbitant out of pocket expenses, deductibles or co-pays.

• No cost sharing for preventive care.

• No dropping of coverage for the seriously ill.

• No more lifetime caps on coverage.

He said these ground rules will not affect companies’ ability to compete since the same rules would apply to everyone. Under the current system, he said, companies cannot “do the right thing” because they will be at a competitive disadvantage.

Individual reform ideas can be debated, Vice President Biden said, but if nothing is done, “in 10 years, one in every five dollars Americans earn will be spent on health care.”

In 30 years, he said, one in every three dollars will be spent on health care.

“Spending by the federal government on Medicare and Medicaid alone will be 15 percent of GDP by 2040. It’s now around five percent,” Vice President Biden said.

The vice president praised insurance commissioners for understanding the need for reform, for speaking out in favor of it, and for dealing first hand with consumer complaints about the current system.

Responding to Vice President Biden’s speech, Connecticut Insurance Commissioner Tom Sullivan said he agreed that the U.S. health care system is on an unsustainable path, but he expressed dismay at the lack of details provided on how to address rising costs in health care.

“[Vice President Biden] talked about bending the cost curve, but I didn’t hear any details on how to bend the cost curve, and I think any elements of reform need to address that with some level of precision and acuity,” he said.

He also cited Mr. Biden’s comments about Medicare and Medicaid and said costs in these existing programs need to be addressed. “I think we need to deal with the public plan today that’s broken with respect to how it’s financed,” he said.

Financing any reform proposals and dealing with the rising costs of health care are the main concerns with any reform efforts, Commissioner Sullivan said.

The NAIC as a body released principles it supports with respect to health care reforms, including:

· Universal coverage.

· Requiring everyone to purchase health insurance just as many states require auto insurance.

· Equal treatment, such as no denials for preexisting conditions.

· Banning the use of health status, gender or occupation when setting premiums.

· Removing caps on annual or lifetime benefits under a policy.

“We’ve agreed to a set of principles,” NAIC president and New Hampshire Insurance Commissioner Roger Sevigny said, while noting that individual commissioners may support other specifics in proposed plans.

He added, “We have not taken a position on any piece of legislation as a body. We are very much sticking to the principles that we’ve made public.”

Commissioner Sevigny along with other state commissioners said they expect to have a regulatory role under any reform plans, and said any diminishment of their regulatory role under, for example, a public option, depends on how the proposal is structured.

NAIC president-elect, and West Virginia Insurance Commissioner Jane Cline said commissioners see their role in reform efforts as technical advisors on the impacts of different provisions of a given bill.

The commissioners expressed confidence that some form of health care reform will be achieved.