Maria Cantwell: Silly Regence! Health Insurance is for Kids!

Senator Maria Cantwell

In yesterday's post about health care reform's staying power, I quoted T. R. Reid saying that our canny Senator Maria Cantwell "got it," when it came to reform that works. Minutes after that post went up, Cantwell's press office sent a release out titled "Cantwell Calls for State Review of Steep Health Care Premium Rate Hikes."

At issue is insurer Regence's decision to stop offering child-only policies and jack 2011 premiums for Washington policy holders by as much as 37 percent. Cantwell says that Regence is attributing the premium increase to health care reform, and in a letter to State Insurance Commissioner Mike "Bulldog" Kreidler, she wrote:

Blaming these premium increases on the Affordable Care Act is clearly contrary to analysis and estimates about the law’s impact on premiums and only perpetuates misunderstanding and misinformation about the law. If Regence chooses to continue anti-consumer policies, I ask that you explore all consequences, including exclusion from the state exchange.

Responds Kreidler: "I'm appalled. We’ve made regulatory concessions to limit Regence’s exposure. Their overreaction will seriously harm Washington families. [...] So far, no other health carrier in Washington state has signaled its intent to leave this market. I hope we can expect better from them." (Here are the firms still selling child-only policies in the state.)

Regence naturally has their explanation for the premium increases, and it turns out it's not Regence's fault. While health care reform requires insurers to keep administrative costs to 20 percent or less, Regence can boast administrative costs of just nine percent. But--and they have a graph that illustrates this--the amount they paid out in claims between 2005 and 2009 "rose from 83.1 percent of the premium dollar to 88.5 percent." Here, take a look at what drives up health care costs.

Bottom line: Note that there's a distinct difference between 5.5 percent inflation over four years and a 37 percent premium increase in one. Regence needs to spell out the rationale for a premium increase that exceeds that. Dropping insurance for children? Spelling that out is unlikely to help.