Biden Says Tighter Regulation of Insurance Industry Is Critical to Health Reform

The Senate Finance Committee approved an $829 billion bill that aims to make health insurance affordable for millions of Americans.
By Michael A. Fletcher
Washington Post Staff Writer
Tuesday, September 22, 2009; 5:27 PM

Vice President Biden added his voice Tuesday to the administration's efforts to reform health care, telling a meeting of state insurance commissioners that tighter regulation of the industry is needed to protect consumers and slow the spiraling cost of medical coverage.

Far from destroying the profitability of health insurance companies, the new regulations envisioned by President Obama would enhance competition and choice for consumers while creating a bounty of new customers, Biden said.

"So, the profits might not be as high per person they cover, but there will be a much larger pool of paying customers," he said.

Speaking to a meeting of the National Association of Insurance Commissioners at National Harbor in Prince George's County, Biden said that without change, the exploding cost of health care will overwhelm the budgets of people, governments and businesses.

Health insurance premiums in states rose between 88 percent and 145 percent in the past decade, far outpacing wages and overall inflation, which increased 38 percent and 28 percent, respectively, over the same period, according to a new Kaiser Family Foundation study cited by the White House. Even as the economy was ravaged by the most severe economic downturn since the Great Depression over the past year, Biden said, health insurance premiums rose 5.5 percent, even as overall prices dropped by 0.7 percent.

"To state the obvious, this is simply an unsustainable position," he said.

Biden said new rules should prevent insurance companies from declining coverage to people with preexisting conditions, should limit out-of-pocket expenses and should not allow companies to drop coverage for patients who are seriously ill. He also said that insurance plans should fully cover preventive care, and allow no exorbitant out-of-pocket expenses, deductibles or co-pays for customers.

"The ground rules don't pick and choose which companies they apply to, they apply to everybody. The playing field is level," Biden said.

Insurance companies have become the focus of those who favor reform, although they generally support revamping health-care regulations. But they oppose forming a government-run insurance company to compete with private firms, as well as taxes on expensive plans. To control insurance costs, they say, lawmakers need to concentrate on reducing medical costs.

"Premiums track directly with the underlying cost of medical care," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a lobbying group that represents nearly 1,300 plans.

Biden's remarks to the insurance commissioners came one day before he was scheduled to speak to a group of seniors in Silver Spring.

© 2009 The Washington Post Company