Insurers begin to adapt to health reform law
By Jennifer Collins Marketplace Morning Report, Friday, May 20, 2011In order to pay for the coverage they'll have to provide for those with preexisting conditions, health insurance companies have been trying to raise premiums by double-digits. Come fall, they won't be able to without approval.
Jeremy Hobson: The federal government has announced new rules for health insurance companies as part of the Obama health care law. Starting September 1 companies will have to get approval if they want to raise premiums by more than 10 percent.
The insurers say that'll lead them to drop coverage in some areas, as Marketplace's Jennifer Collins reports.
Jennifer Collins: One of the big promises of health care reform is that everyone in the U.S. can get coverage, regardless of preexisting conditions.
Ethan Rome is with Health Care for America NOW! He says insurers anticipate paying for all those preexisting conditions.
Ethan Rome: And they've been jacking up rates at double-digit levels.
Starting this fall, if insurance companies want double-digit increases, they'll need permission to do it on individual or small group plans. Peter Pitts is with the Center for Medicine in the Public Interest.
Peter Pitts: Certain insurance companies will just decide not to do business in certain states and areas where they simply can't get the rates they need to stay in business.
Christopher Bowe is a health care analyst with Informa.
Bowe: My guess is they'll be flexible and look for ways to change their business model to stay profitable and become more efficient.
He says insurers have shown flexibility. The health insurance industry is on its way to a third year of record profits.
I'm Jennifer Collins for Marketplace.
