White House targets insurers over healthcare premiums

WASHINGTON (Reuters) - The White House kept insurance companies squarely in its sights Tuesday in the push for healthcare reform by releasing research showing that health insurance premiums have risen far faster than inflation in every U.S. state.

Rulour Torio, M.D. (L) examines Pabitra Timsina, (R) a refugee from Bhutan, at the El Franco Lee Health Center in Houston, Texas, July 28, 2009. REUTERS/Jessica Rinaldi

U.S. states have experienced premium growth of 90 percent to nearly 150 percent in the past decade, while wages have risen 38 percent and inflation by 28 percent, the report by the White House’s National Economic Council said.

“In every state, premiums have increased faster than wages and in every state, family budgets are consumed by an increasing share of healthcare premiums,” the report said.

Vice President Joe Biden spoke Tuesday to the National Association of Insurance Commissioners, in remarks highlighting the report.

“The status quo of rising premiums is simply unsustainable for families, for businesses, for state budgets, and for our national economy,” Biden said.

President Barack Obama has pushed for a sweeping healthcare overhaul that he says would rein in costs, create competition for insurers and expand coverage to many of the 46 million uninsured people living in the United States. The overhaul of the $2.5 trillion industry is his top domestic policy priority.

Brian Deese of the National Economic Council said Obama’s reform plan would include tighter regulation of insurance companies.

“As of 2008 ... fewer than half of states required a full review when insurers wanted to increase premiums at the state level,” Deese told reporters on a conference call, “... even if it’s all going mostly to profits.”

Obama’s healthcare reform effort has been besieged by critics and slowed by battles in Congress, where elements of the insurance and healthcare industries have lobbied against parts of it and Republicans and some conservatives in Obama’s Democratic Party have expressed reservations about the expensive plan’s cost and timing, given the recession.

Robert Zirkelbach, spokesman for America’s Health Insurance Plans, an association representing 1,300 U.S. health insurance firms, said the criticism is misdirected, and that health insurance premiums track the ever-rising costs of healthcare.

“We agree that rising healthcare costs need to be addressed as part of comprehensive healthcare reform,” he said, adding that the insurance industry is a supporter of many aspects of reform, but has been targeted recently as the White House pushes its plans for an overhaul.

The U.S. Senate Finance Committee began consideration of its long-delayed version of a healthcare reform bill on Tuesday, with costs and affordability topping the list of concerns for Democrats who control the panel.

In his remarks, Biden noted that premiums in Alaska increased 145 percent in 10 years while wages grew 35 percent, and in Florida premiums rose 121 percent while wages increased 43 percent. He said Michigan had the smallest gap, 37 percent.

Editing by Eric Beech and Vicki Allen