Maine official: Insurance crisis ‘slowly killing off the American middle class’

Posted Sept. 22, 2009, at 9:13 p.m.

Maine’s insurance commissioner, Mila Kofman, was one of four state insurance commissioners asked to participate in a White House media conference call Tuesday highlighting the importance of health insurance reforms contained in the national heath care overhaul under debate in Congress.

The insurance commissioners discussed a recent report released by the Kaiser Family Foundation showing that the average family health insurance premium for an employer-sponsored policy rose at a rate of 5.5 percent over the last year, even while the national economy plummeted and inflation fell.

While there is “considerable variability” from state to state, the rise in the cost of health insurance premiums has far outstripped wage increases in every state, said White House Economic Adviser Brian Deese, who hosted the conference call. Tightening industry regulations at the national level is essential to holding down costs for all Americans and expanding coverage to the uninsured, he said.

The report calls for eliminating the practice of refusing to cover people with pre-existing medical conditions, holding down out-of-pocket spending requirements, eliminating lifetime caps on coverage, and extending the length of time young adults may be covered by a family policy.

Kofman said that while Maine has been in the forefront in enacting regulations that protect consumers, “the health care crisis cannot be solved by states alone.” There must be industry-wide regulation that prohibits companies from dropping coverage when a policyholder becomes ill, she said, as well as a mandate for all Americans to have some form of coverage and a system of subsidies that helps them purchase that coverage.

“The health care crisis is slowly killing off the American middle class,” Kofman said. “Being one illness away from bankruptcy is unacceptable for individuals and families.”

In addition to Kofman, insurance commissioners from Kansas, Pennsylvania and Michigan spoke during the meeting.

Commissioner Joel Ario of Pennsylvania said the insurance market in his state is relatively unregulated.

“Pennsylvania is often cited as having lower rates, especially for the young and healthy,” he said. “But if you’re not young and healthy, you’re even worse off because young healthy people aren’t paying their fair share.” Requiring coverage for everyone would eliminate the insurance industry practice of “cherry-picking” healthier populations to cover while excluding those who are more likely to use the health care system, he said.

Speaking to a meeting of the National Association of Insurance Commissioners earlier in the day, Vice President Joe Biden said the report shows that “we need good ground rules for all insurance companies to abide by to restore stability and security to our health care system.”

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