It was nice of the New York Times to print a story on the fast rise of health insurance premiums nationwide, just a day before President Obama’s meeting with health insurance executives about rising premiums. The president needs all the help he can get, since the final health reform law gives government exactly zero power to control insurance premiums.
The price spikes around the country (especially in California), emhasized consumers’ stake in health reform, and how insurance companies react to it.
“We’ve got to make sure that this new law is not being used as an excuse to simply drive up costs,” Obama said after the meeting. But he doesn’t have authority, aside from his influence and prominence, to make sure insurers do anything. The insurance lobby prevented the government from gaining any actual power to curb premiums during the writing of the r health reform bill itself.
And of course we know how far we should trust insurance companies, which this year were found to be padding their rates on individual policies in California. Even Wellpoint’s actuaries were making, um, mistakes in their math that favored the company and cost consumers.
Obama emphasized that the White House is encouraging states to develop their own regulations to effectively control insurance premiums and rates. The Department of Health and Human Services will also have the power to make insurance companies "justify" rates that are "unreasonable." Both of those words will need a lot of defining before we know if they’ll mean much to consumers. And they don’t amount to a real stick.
Where the White House can have some real power is in the writing of regulations to implement the bill’s larger reforms. Insurers are already turning their lobbying might on the regulation-writing, seeking to weaken or cripple anything that threatens their business model, profits or lavish executive salaries. How the White House and HHS react to this effort will tell us who’s going to control the larger reforms.