Sebelius to Insurers: Shut Up Or Else on ObamaCare Increasing Premiums; To AP, It's Mere 'War of Words'

ObamaSebeliusAdopting language and tactics more typical of tyrants, Health and Human Services Secretary Kathleen Sebelius yesterday sent a public letter to the head of a health insurance industry group demanding that carriers stop "falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act," and that "that there will be zero tolerance for this type of misinformation and unjustified rate increases."

She reinforced her short-term threat with a longer-term one:

We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014. Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.

When Sebelius threatens exclusion from the "Exchanges," she is really saying: "Shut up and eat your costs, or you'll be out of business in a few years."

Keep in mind that three months ago (noted at NewsBusters; at BizzyBlog), leaked government documents estimated that, depending on the assumption sets used, anywhere from 49%-80% of small employer health plans and 34%-64% of large employer plans would be forced financially or otherwise to "relinquish" their "grandfathered" status by 2013 (a table showing the percentages is here). This necessarily means that the market for private plans will decrease, while the market for those who would be forced to buy coverage through the "Exchanges" (what's with the uppercase?) will necessarily expand.

If you didn't expect that the Associated Press's coverage of Sebelius's threats by Ricardo Alonso-Zaldivar wouldn't make this linkage, you're right -- even though he covered that story (weakly) when it broke. In fact, the AP writer characterized them as "warnings" and part of a "war of words" in his coverage (HT Hot Air):

HHS to insurers: Don't blame us for your rates

President Barack Obama's top health official on Thursday warned the insurance industry that the administration won't tolerate blaming premium hikes on the new health overhaul law.

"There will be zero tolerance for this type of misinformation and unjustified rate increases," Health and Human Services Secretary Kathleen Sebelius said in a letter to the insurance lobby.

"Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections," Sebelius said. She warned that bad actors may be excluded from new health insurance markets that will open in 2014 under the law. They'd lose out on a big pool of customers, as many as 30 million people nationwide.

The letter to America's Health Insurance Plans was the latest volley in a war of words over who gets the blame for rising premiums. Polls show that many people expect their costs to go up as a result of the law, but there's also widespread mistrust of the insurance industry.

Note how helpful the AP writer is to Sebelius's cause with his reference to "bad actors," as if a company passing on otherwise legitimate cost increases is presumptively so. It's also a complete whitewash to describe what's going on as a "war of words," when the government is browbeating carriers into reducing otherwise presumably justifiable increases, while brazenly brandishing denial of access to the "Exchanges" and other sanctions as weapons.

Though I can't be sure, it appears that Alonso-Zaldivar got his 30 million figure from estimates of "the uninsured" -- really those who don't have insurance for a brief period during a given year -- who would become covered under ObamaCare. If that's the case, he has totally ignored Treasury's preliminary estimates of those who would have to flee to the "Exchanges" as a result of employer plan terminations. Even at the low end of Treasury's estimates (a blended 39% of small and larger employers, assuming that terminated plans have similar average numbers as those which remain), as many as 48 million Americans (39% x roughly 190 million Americans under age 65 x roughly 65% who currently have private plan coverage) would be herded into the exchanges by the end of 2013.

Now there's a threat, namely that the "Exchanges" will be so overwhelmed by new applicants that they will fail to function properly and disrupt the entire system of medical care delivery.

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.