The focus of some sharp criticism in recent days, the nation’s private insurance companies are now taking Washington, D.C., to task for painting them as the bad guys, solely responsible for rising healthcare costs.

Following the release of President Barack Obama’s proposal on achieving bipartisan, health care reform, both American’s Health Insurance Plans and the Blue Cross Blue Shield Association were among those voicing concern over insurance being the main target of the need for reform.

Karen Ignagni

Karen Igagni, AHIP’s president and CEO, noted the “enormous amount of attention” premium increases in the individual market are receiving in the light of a delayed request by Anthem Blue Cross in California and a subsequent U.S. Department of Health and Human Services report taking aim at such increases as a main driver for reform.

“This concern is understandable, especially at a time when people across the country are struggling to make ends meet and having to make tough choices in their personal budgets,” Ignagni said in a statement. “The central policy question that should be asked is: What is driving these increases and whether the measures being proposed will work? Families are counting on policymakers to step up and address the problem so that costs are brought under control and all Americans have health security. Our members want that too.”

Ignagni said, however, that “there is a heavy does of politics at work,” where health plans are the focus “because of very few policymakers want to take on the real issue of why costs are rising.

“To suggest that cost containment can be achieved by singling out health plans ignores the very inconvenient truth that premium increases reflect increases in the underlying cost of medical services,” she said.

Premium regulation criticized

Ignagni said that a weak economy is causing younger and healthier Americans to drop their insurance and as a result, the rates for those who need coverage increases. Hence, AHIP is advocating for insurance market reforms, including guaranteed coverage with no pre-existing condition exclusions or health status rating, along with an effective individual mandate for coverage.

“Regulating premiums won’t do anything to reduce the soaring costs of medical care,” Ignagni said. “This would be like capping the prices auto makers can charge consumers, but letting the steel, rubber, and technology manufacturers charge the auto makers whatever they want.”

Additional criticism to the White House plan to regulate premium increases came from the Blue Cross Blue Shield Association, who questioned the need for a federal agency to assist states with what the Obama Administration called “unreasonable” rate increase requests.

The creation of the new Health Insurance Rate Authority, BCBSA said in a statement, “ignores the unique cost drivers in each of the 50 state insurance markets.

“This new agency, which creates a highly politicized federal review process, would divorce premium review from the state regulators’ responsibility of assuring that health plans have enough funds to pay future policyholder claims, potentially leading to multi-plan insolvencies across the country,” the association said. “The risks of such a proposal – namely undermining the security and stability of Americans’ health insurance – must not be ignored.”

Like AHIP, the BCBSA, which represents 39 Blue Cross and Blue Shield affiliates providing health insurance to nearly 100 million people in the U.S., advocated for reform that addressed the underlying drivers of healthcare costs, including higher prices from cost-shifting by healthcare providers to the private sector due to underpayments by government programs and lack of care coordination and a delivery system that rewards volume rather than quality.

“We are troubled that several provisions in the president’s proposal would make coverage even more expensive,” the BCBSA said. “These provisions include putting new taxes on people’s insurance, requiring many people to buy richer benefit packages than they do today, and allowing millions of people to forgo coverage until they are sick – driving up costs for everyone.”

Health insurer Aetna declined a IFAwebnews.com request for comment on the White House proposal, while CIGNA representatives said they were deferring comment to AHIP.