Government's inability to lower health insurance rates

Armen Hareyan's picture
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Acknowledging his inability to lower health insurance rates, yesterday President Obama said that he can not issue an executive order and lower rates of all people. Yet, there are steps the government can take making health care affordable for Americans.

Obama said that he lacks the authority to force private health insurance companies to eliminate high increases in their insurance policies. The president said getting the health care reform passed is more important today than ever. His administration is now asking why California based Anthem Blue Cross is increasing health insurance rates, pointing why it is necessary to pass the reform on health care.

Anthem raised the premiums for Californians as much as 39 percent. People in California are furious. According to SF Gate, while California cannot ask the insurance provider to change the rates or cannot dictate the rates, there is at least one thing the State can do and is prepared to do. The state law in CA required that the health insurance providers spend at least 70 cents per dollar on health care costs for each dollar spent on premiums. Now CA Health Insurance Department plans to hire an independent and outside actuarial firm to determine whether Anthem Blue Cross Blue Shield spends at least 70 cents of every premium dollar on health benefits.

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According to SF Gate Anthem increased the health insurance premiums last year too. Then it was some 68 percent. Now it's another 39 percent.

Secretary of Health, Kathleen Sebelius made the request expecting answers from Anthem. Shenoted that the company authorized increases in the policy even though it had revenues of 2.7 billion dollars in just one quarter.

The American public is frustrated when talking about health reform. Yet, there are no short cuts to deal with the problem. Health insurance premiums are high. They are not affordable. Millions of people are deprived from health care and the insurance companies hike the rates up knowing that the government has no legal authority to dictate them low rates.

"It's a complicated, difficult, but what is true is that without some action by Congress, it is unlikely that we can see an improvement in the current path," Obama said. The current trend in health care is the gradual increase of cost. Another trend is that more and more people will lose their health insurance coverage in years to come.

The two health care bills, passed in the House and Senate, are in limbo. Now much will depend on the February 25th health care summit that the president has convened to discuss the reform. Both versions of the health care bills offer ways to improve the system, but they differ in wasy of how to provide health coverage to more than 30 million uninsured Americans.

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