# Public Option

Wellmark customers will pay more starting May 1

Approximately 80,000 Iowans will face substantial health insurance premium hikes beginning May 1. An independent review has confirmed the "need" for Wellmark Blue Cross and Blue Shield to raise rates by an average of 18 percent. The higher rates were intended to go into effect on April 1, but last month Governor Chet Culver ordered a delay pending an review of the matter. The Des Moines Register reports today,

[Iowa Insurance Commissioner Susan] Voss said in a memo to Culver that Wellmark's losses supported "the need for the rate increase" based on two separate actuarial analyses conducted by INS Consultants, a Philadelphia actuary. The group also found that the insurance division's rate review process is actuarially "acceptable" and "reasonable" compared with INS's methodology.

Birny Birnbaum, head of the Center for Economic Justice, a nonprofit consumer advocacy group in Texas, said it's unlikely that INS would disagree with the rate increase.

"While INS is technically independent, there is no way the firm would contradict and embarrass the agency which hired the firm," Birnbaum said Monday. "If INS were to contradict the insurance division, it would likely not be hired in the future by the Iowa Insurance Division or any other insurance regulator."

Speaking to the Register, State Representative Janet Petersen touted legislation passed during the 2010 session, which is intended to give consumers more information and warning regarding health insurance premium increases. After the jump I've posted some key points from Senate File 2201 and Senate File 2356.

These bills contain a lot of good provisions but probably won't solve this particular problem for many Iowans. Wellmark dominates the insurance market in this state. Giving people a few weeks to shop around won't magically allow them to find a better deal. In addition, health insurers can still exclude coverage for pre-existing conditions until 2014. The only real choices Wellmark's individual customers have are: 1) pay a lot more, like my family, or 2) downgrade to a policy that's less comprehensive and/or involves higher out-of-pocket costs for medical care.

Iowa House Republican leader Kraig Paulsen showed his creative side yesterday, finding a way to blame Democrats for Wellmark's rate hikes:

Paulsen pointed out that the Democrat-controlled Legislature has voted in recent years to impose several health insurance mandates, such as coverage of cancer clinical trials and prosthetics.

"It's indisputable that those add to rates. That's just the way it works," he said.

Health insurance mandates drive up costs for Iowans, Paulsen said.

"Mandates aren't necessarily requirements that insurance companies sell something. They're requirements that purchasers buy something," he said.

One legislative proposal would have allowed state-regulated health insurance companies to provide mandate-free coverage "for those who want a less comprehensive product," Paulsen said.

That idea by House Republicans failed, as did a proposal to study allowing out-of-state insurers to offer policies in Iowa, which could help Iowans find cheaper policies, he said.

Come on, Mr. Paulsen, who ever anticipates needing prosthetics someday, or being in a position to benefit from a cancer clinical trial? Anyway, that cancer clinical trial bill passed both the Iowa House and Senate unanimously. Also, allowing out-of-state insurers to sell policies here would spark a "race to the bottom" in terms of consumer protection.

Share any relevant thoughts in the comments.

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Health insurers hit individuals with steep rate hikes

How does a 15 to 20 percent increase in one of your household’s major expenses sound to you? About 80,000 Iowans (including me) better get used to the idea:

About 80,000 Iowans who buy their own health insurance through Wellmark Blue Cross Blue Shield will pay an average of 18 percent more this year, the largest increase in four years.

The state’s largest health insurer will begin notifying the individual policyholders this week of the increase.

Rising health care costs are driving the premium increases, said Rob Schweers, a Wellmark spokesman. Premium increases, which take effect April 1, range between 10 percent and 25 percent, the company said.

It’s the largest average annual increase since 2006, Wellmark data show.

Last year, Wellmark raised insurance rates for individual policyholders by an average of 9.3 percent.

This year’s increases “are a combination of medical cost inflation and increased usage,” Schweers said. “Also, people are getting sicker as a population. There are more chronic diseases.”

Premiums tend to be more volatile for individual policies than for those bought by employers and other large groups, which can negotiate for lower rates and spread risk among employees and members.

Hey, it could be worse: about 700,000 Anthem Blue Cross customers in California will see an average rate increase of 25 percent in May, and many of those will see their insurance premiums go up 35 to 39 percent. The rate hike cannot be justified by increasing medical costs alone. According to California’s insurance commissioner, medical costs in that state have gone up about 10 to 15 percent.

The U.S. inflation rate in 2009 was about 2.7 percent, by the way. Many people have seen their wages decrease during the recession.

Not many businesses can get away with increasing prices for goods or services by many times the rate of inflation year after year. The health insurance industry is different because most of their customers have no place else to go. In most parts of the country, one or two insurance companies dominate the market. Wellmark controls about 70 percent of the market in Iowa, for instance. Wellmark customers may not be able to find another insurance company willing to cover them, especially if they have any pre-existing conditions.

Aren’t you glad Republicans and cowardly Democrats “saved” us from “government-run” health care in the form of a public health insurance option?

The Des Moines Register’s editorial board cited the insurance premium hikes as evidence that the U.S. needs comprehensive health care reform with a “public option.” I couldn’t agree more, but the events of the past few months give me zero hope that Congress will approve any decent health care legislation.

Eight Democratic senators are urging Majority Leader Harry Reid to include a public option in a new health care bill that could be passed using the Senate’s budget reconciliation rules. Bills passed that way are not subject to a filibuster and can pass with 51 votes, or in this case 50 votes plus Vice President Joe Biden. Some bloggers are asking activists to contact Senate Democrats to get them on board with this effort. If you are so inclined, feel free to contact Senator Tom Harkin’s office. He was a vocal advocate of the public option last year. Frankly, I don’t feel like wasting my time anymore. If 50 Democratic senators were committed to passing a good health care bill through the reconciliation process, Reid would have been working on that option six months ago.

More important, if President Barack Obama had been interested in passing a strong health care bill, he would have been pushing for reconciliation all along instead of cutting backroom deals with industry while his spokesman praised efforts to find a bipartisan compromise in the Senate. It was obvious last summer that Republicans like Chuck Grassley were just stringing out the process with a view to killing reform.

The White House summit that Obama is convening next week looks like nothing more than a photo-op to me. I can’t see what good can come out of that other than PR for the president.

Share any relevant thoughts in this thread.

UPDATE: More than a dozen Senate Democrats have signed on to passing health care reform with a public option through reconciliation.

LATE UPDATE: We received a letter from Wellmark on February 23 informing us that our premiums will go up 22 percent as of April 1, 2010.  

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Year in review: national politics in 2009 (part 1)

It took me a week longer than I anticipated, but I finally finished compiling links to Bleeding Heartland's coverage from last year. This post and part 2, coming later today, include stories on national politics, mostly relating to Congress and Barack Obama's administration. Diaries reviewing Iowa politics in 2009 will come soon.

One thing struck me while compiling this post: on all of the House bills I covered here during 2009, Democrats Leonard Boswell, Bruce Braley and Dave Loebsack voted the same way. That was a big change from 2007 and 2008, when Blue Dog Boswell voted with Republicans and against the majority of the Democratic caucus on many key bills.

No federal policy issue inspired more posts last year than health care reform. Rereading my earlier, guardedly hopeful pieces was depressing in light of the mess the health care reform bill has become. I was never optimistic about getting a strong public health insurance option through Congress, but I thought we had a chance to pass a very good bill. If I had anticipated the magnitude of the Democratic sellout on so many aspects of reform in addition to the public option, I wouldn't have spent so many hours writing about this issue. I can't say I wasn't warned (and warned), though.

Links to stories from January through June 2009 are after the jump. Any thoughts about last year's political events are welcome in this thread.

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Health reform bill clears 60-vote hurdle in Senate

Last night the U.S. Senate voted 60 to 40 to move forward with debate on the health insurance reform bill. All senators who caucus with Democrats voted for cloture, and all Republicans voted against. The breakthrough came on Saturday, when Senate Majority Leader Harry Reid secured Senator Ben Nelson’s support with extra money for Medicaid in Nebraska and new language on abortion.

At Daily Kos mcjoan published a good summary of what’s in the latest version of the bill.

Reid reportedly promised Nelson a “limited conference” on this bill, meaning that very few changes will be made to the Senate version. However, it’s far from clear that the House of Representatives will approve the Senate’s compromise. About two dozen House Democrats plan to vote against health care reform no matter what, meaning that it will only take 15-20 more no votes to prevent supporters from reaching 218 in the House.

Bart Stupak, lead sponsor of the amendment restricting abortion coverage in the House bill, has been working with Republicans against the Senate’s abortion language. Meanwhile, the leaders of the House pro-choice caucus have suggested the Senate language may be unconstitutional.

Even before Reid struck the final deal with Nelson, Representative Bruce Braley told the Des Moines Register, “I think the real test is going to be at the conference committee and if it doesn’t improve significantly, I think health care reform is very remote based on what I’m hearing in the House.”

Senator Tom Harkin has done several media appearances in recent days defending the Senate compromise. He seems especially pleased with the Medicaid deal for Nebraska:

The federal government is paying for the entire Medicaid expansion through 2017 for every state.

“In 2017, as you know, when we have to start phasing back from 100 percent, and going down to 98 percent, they are going to say, ‘Wait, there is one state that stays at 100?’ And every governor in the country is going to say, ‘Why doesn’t our state stay there?'” Harkin said. “When you look at it, I thought well, god, good, it is going to be the impetus for all the states to stay at 100 percent. So he might have done all of us a favor.”

Ezra Klein has posted some amazing spin this morning about how the Senate bill is “not very close to the health-care bill most liberals want. But it is very close to the health-care bill that Barack Obama promised.” Sorry, no. Obama campaigned on a health care plan that would control costs and include a public insurance option, drug re-importation, and letting Medicare negotiate for lower drug prices. Obama campaigned against an individual mandate to purchase insurance and an excise tax on insurance benefits.

Those of you still making excuses for Obama should listen to what Senator Russ Feingold said yesterday:

“I’ve been fighting all year for a strong public option to compete with the insurance industry and bring health care spending down,” Feingold said Sunday in a statement. “Unfortunately, the lack of support from the administration made keeping the public option in the bill an uphill struggle.”

Republican Senator Olympia Snowe was about as unprincipled and two-faced during this process as White House officials were. She voted for the Senate Finance Committee’s bill in October and had suggested her main objection to Reid’s compromise was the inclusion of a public health insurance option. Yet Snowe remained opposed to the bill even after the public option was removed last week. Because of her stance, Reid cut the deal with Nelson. The supposedly pro-choice Snowe could have prevented the restrictions on abortion coverage from getting into the bill if she had signed on instead.

Speaking of Republicans, the Iowa Republican posted this rant by TEApublican: “Nebraska And Huckabee Respond To Ben ‘Benedict’ Nelson’s Christmas Senate Sellout.” If you click over, be prepared to encounter mixed metaphors and misunderstandings about what this “reform” does. Still, the rant is a good reminder of how Republicans will still scream about government takeovers even though corporate interests got everything they wanted out of the bill.

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