Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — Kansas Insurance Commissioner Sandy Praeger is one of five state insurance regulators asked to sit in today on a White House meeting in which President Barack Obama is expected to sternly warn health insurance executives against sharp increases in premiums.

"Commissioner Praeger is there," said Bob Hanson, an insurance department spokesman. "And is planning to turn around quickly and fly home this afternoon."

Insurance industry spokesmen, including those for Blue Cross Blue Shield of Kansas, the state's largest private health insurer, have said the new federal health reforms signed into law earlier this year will make premium increases likely, if not inevitable.

"The new statute creates a lot of pressure upward on the cost of health insurance," said Matt All, vice president of public policy and human development for Blue Cross Kansas.

On Monday, the Kaiser Family Foundation released a study showing that policies most recently purchased for individual coverage had increased 20 percent on average.

The new reform law calls for tighter regulation of premiums by state insurance overseers and limits what insurance companies can ask for by requiring certain percentages of the companies' costs be spent on medical care.

For individual policies, companies will be expected to spend 80 percent of costs on medicine or prevention, though exact guidelines for what will be allowed in the calculation of so-called "medical-loss" ratios is still being worked out by committees of the National Association of Insurance Commissioners. The new law will require that 85 percent of insurance company revenues from group policies be spent on medical care.

The NAIC committee overseeing development of those guidelines is chaired by Praeger, a Republican who also played a key role for NAIC in negotiations with Congress as the health reform law was written.

Praeger was unavailable for comment Tuesday but she told the Wall Street Journal before the meeting that she intended to ask for a more gradual phase-in of the medical-loss ratio requirements.

“We’ll certainly bring it up,” Praeger told the paper. “I don’t know if it’s possible” to delay the change."

The Obama administration is worried insurers will raise rates before the new rules are effective and blame the new law for premium increases aimed at maximizing profits rather than covering claims.

“Our message to them is to work with this law, not against it; don’t try and take advantage of it or we will work with state authorities and gather the authority we have to stop rate gouging,” White House senior adviser David Axelrod, said in an interview reported in today's New York Times. “Our concern is that they not try and, under the cover of the act, get in under the wire here on rate increases.”