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Top challenge for U.S. health nominee will be to keep insurance costs low

Bloomberg

The first challenge Sylvia Mathews Burwell may face as America’s top health official could come from the insurance industry.

WellPoint Inc., the biggest commercial insurer in the health law’s exchanges, said last month it may seek “double-digit plus” premium increases for 2015. While many other insurers have declined to comment on next year’s rates, large price increases may chase people away in year two of “Obamacare,” giving foes impetus to push for changes.

Republicans say Burwell will be asked to explain her qualifications and answer questions that her predecessor as health and human services secretary, Kathleen Sebelius, avoided. That includes whether the ratio of healthy, young people to older Obamacare enrollees will cause insurers to raise prices next year. HHS may be reviewing proposed rates for 2015 plans, due in June, during the leadership transition.

Insurers “want it to become conventional wisdom that rates are going to go up substantially,” said Jay Angoff, a Washington-based lawyer who previously worked at HHS and was the state insurance commissioner in Missouri. Burwell should publicly rebut that idea, according to Angoff. “By no means should people assume rates will go up, much less go up substantially,” Angoff said.

Angoff said one move Burwell could take to keep premiums as low as possible would be to make insurers’ proposals public. Under Sebelius, he said, the government kept secret — at the insurers’ request — a key document called the actuarial memorandum that is used to justify rates. The memos are “the guts of the filing,” said Angoff.

The filings contain “sensitive proprietary information” that the agency believes should remain private, said Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services that oversees the health exchanges.