If Obama ever wished he could tell Insurance to just go and “take a hike”, I’m sure he wouldn’t mean it in a literal sense. A California-based insurance company’s decision to raise policyholders’ premium rates by as much as near 40% has prompted a state inquiry and the ire of HHS Sec’y Kathleen Sebelius. The attention the White House is giving this case at a time when reform efforts are rocky is somewhat of a balm for the president’s increasingly wounded pride on the effort to promise wider healthcare access and affordability as dictated during his campaign for the nation’s highest office. Why would an insurance company, even if it is for-profit, create such a negative PR issue for itself at a time when unemployment — and by extension, healthcare inaccessibility — in California and nationwide are at such cripplingly high levels?

The answer is probably not as simple as “because it can”. Certainly, as a private for-profit company, it has the freedom to raise rates without any special justification. Even in the face of statewide investigations at the hands of the state (California’s insurance commissioner) and federal inquiries (Sebelius), there is very little that will probably come of this. The company (whose parent is health insurer Wellpoint) appears to be in the financial black and only needs to cite the vaguest of reasons for imposing such premium increases over the course of a year for its policyholders — the rising cost of medical care. Although California prohibits Insurance spending below 70% based upon benefits (greater than 30% on “admin” costs), numbers like these are difficult to track and pinpoint, making the problem a perennial one.

For Obama, his concern may be a little to late to the game. He’ll get an “A” for effort, though, if he can spin this to generate enough political capital in his overall push for reform. | LINK

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