Biden Argues That Insurers Can Win Too If Health Reform Is Made Law

National Harbor, Md.
Health care reform makes sense not only for the nation and for Americans but also for insurers, asserted Vice President Joe Biden during his address at the fall meeting of the National Association of Insurance Commissioners here.

Biden emphasized two points during his address: the work of insurance commissioners and their proximity to the concerns of citizens in their states and the impact of the current health care plight; and the possibility of change that would benefit the country and would create new business for health insurers. In fact, much of Biden’s speech focused on the absolute need for the nation to address the runaway cost of health care which he says is gradually overtaking the U.S. budget.

“You get the front-row seat not only in seeing how it works and doesn't work, but in being the first line of intercession, complaint, concern, asking for help,” Biden said of the role of insurance commissioners.

Biden emphasized, the current system is not working. He noted the disparity between premium increases and salary increases in the last decade, a respective 145% and 35% in Alaska; 121% and 43% in Florida; and at best a 37% gap between premium and wage increases in Michigan which he said is “being battered now as a consequence of this Great Recession.”

But he said that providing health care for Americans would not need to come at the expense of health insurers. “I want to get this clear. I want insurance companies to make money. I want insurance companies to be able to provide a return on their investment and their stockholders to benefit. I want them -- continue to do their job and make a profit. But I also want them held accountable.”

And how will they make a profit? Biden says that while “insurance companies may not be able to drop some of the most costly patients anymore, but when every American -- every American has health insurance, they will have up to tens of millions of new customers, probably in the order of 30 to 40 million new customers, a significant portion of whom are healthy and young and inexpensive to cover their cost. So the profits might not be as high per person they cover, but there will be a much larger pool of paying customers.”

And, he contended, America is being swallowed in health care costs: spending on Medicare and Medicaid, currently about 5% of GDP will be 15% by 2040; and in 30 years $1 out of every $3 Americans earn will be spent on health care compared with $1in $5 anticipated in 10 years.

Following the address, commissioners reacted to Biden’s remarks. Illinois Insurance Director Michael McRaith said that there is growing bipartisan consensus that something needs to be done on health care. Among the most common complaints his department sees are denied claims and rescinded policies, he added. When asked about challenges states face such as ERISA preemptions, McRaith said that “the enhanced involvement of states” is needed and ERISA reform should be explored in any form available including state pilot programs.

Jane Cline, West Virginia insurance commissioner and NAIC president-elect, said that the hope is for bipartisan legislation and Sandi Praeger, Kansas insurance commissioner and former NAIC president, said that regardless of the plan, she feels “obligated to speak out” on elements of any plan that she feels is “inherently good and fair” for the country. “I hope we don’t lose sight of the endgame,” she added.

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Photo Courtesy of NAIC