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Life Health > Health Insurance

Health Care Reform: Obama's Warnings to Carriers, Employers

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So it appears that President Obama is taking some steps to make sure carriers and employers don’t use the oncoming health care reform as an excuse to make things more costly on everybody.

First, the White House released a set of rules and regulations aimed at discouraging employers from cutting health benefits or raising the cost to employees.

“The rules limit the changes that employers can make if they want to be exempt from certain provisions of the health care law passed by Congress in March,” writes New York Times reporter Robert Pear. It seems that if a company wants grandfather status – health plans in place earning exemption from the reform rules and regulations – they’ll need to be careful about the measures they take to keep costs at a minimum.

Then, on June 22, Obama met with the CEOs of more than a dozen major insurance carriers to warn them against hiking rates simply because they could.

“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,” reported the Washington Post on June 23. “The CEOs here today need to know that they’re going to be required to justify unreasonable premium increases.”

Some groups, such as AHIP, call this a move in the right direction that, if followed, would allow consumers and other industry critics to see that rate increases aren’t just a result of corporate greed. When the cost of care goes up, so must the cost of coverage.

And it’s not just a veiled threat on the part of the President – starting next year, the Department of Health and Human Services is set to begin working with states on annual rate increase reviews, demanding carriers to provide reasoning for “unreasonable” changes. The definition of “unreasonable” is somewhat up in the air – though a recent study by the Kaiser Family Foundation suggests that increases of 20 percent of more aren’t uncommon in the individual market.

So what do you think? Will the guidelines in place help curb unnecessary rate increases and unreasonable activity on the part of employers? Or is it simply smoke and mirrors that will fail to protect consumers from the fallout of reform? Share your opinions here.


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