President Obama’s press conference earlier this afternoon offered some interesting points for the insurance industry. Here are some takes from the address and the question and answered that followed with the White House press core.
On health care, the President offered the following:
Any plan would have to control cost; “Unless we act, one out of every five dollars that we earn will be spent on health care within a decade. And the amount our government spends on Medicare and Medicaid will eventually grow larger than what our government spends on everything else today.”
So, any bill that arrives from Congress that doesn’t control costs won’t be a bill he says he will be able to support.
On insurance companies, he offered the following:
A public health plan would be an important tool to “discipline insurance companies.” An exchange or marketplace plan would provide an option that is not profit driven and would keep down administrative costs as well as offer quality care at a “reasonable price.”
On the possibility of driving insurers out of business:
“Why would it drive private insurers out of business? If private insurers say that the marketplace provides the best quality health care, if they tell us that they're offering a good deal, then why is it that the government -- which they say can't run anything -- suddenly is going to drive them out of business? That's not logical.”
But just conceptually, the notion that all these insurance companies who say they're giving consumers the best possible deal, that they can't compete against a public plan as one option, with consumers making the decision what's the best deal. That defies logic, which is why I think you've seen in the polling data overwhelming support for a public plan.”
On financial services reform:
“I would say that all financial regulators didn't do everything that needed to be done to prevent the crisis from happening.“
He also noted that there were too many gaps in regulation and not sufficient laws on the books such as in the non-banking sector.
The Fed should deal with systemic risk in any financial services oversight reform and a separate agency should address consumer protection, he added.
Part of that consumer protection includes annuities, he noted.
“But that's not the only part of financial regulation. One of the things that we're putting a huge amount of emphasis on is the issue of consumer protection -- whether it's subprime loans that were given out because nobody was paying attention to what was being peddled to consumers, whether it's how credit cards are handled, how annuities are dealt with, what people can expect in terms of understanding their 401(k)s. There's a whole bunch of financial transactions out there where consumers are not protected the way they should, and that's why we said we're going to put forward a consumer financial protection agency whose only job it is to focus on those issues.”