Sebelius Urges Reluctant Insurers To Back Changes

ROBERT SIEGEL, host:

From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

For weeks the Obama administration has focused its health care energies on a single opponent: not Republicans, but the health insurance industry. Today, Health and Human Services Secretary Kathleen Sebelius took the fight to the lion's den: the annual Washington meeting of the industry's trade group.

NPR's Julie Rovner was there.

JULIE ROVNER: Yesterday, the streets around the Ritz-Carlton in downtown Washington were filled with thousands of anti-health insurance industry protestors.

(Soundbite of crowd protest)

Unidentified Man #1: What do we want?

Unidentified Group: Health care.

Unidentified Man #1: When do we want it?

Unidentified Group: Now.

ROVNER: But today, the demonstrators had gone home, and the mood inside the hotel was a lot more, well, polite. Here's how Secretary Sebelius, a former insurance commissioner, greeted insurance trade group CEO Karen Ignagni.

Secretary KATHLEEN SEBELIUS (Department of Health and Human Services): She was kind enough to send me the dress code memo today: grey suit, blue shirt. So, I appreciate those nice touches...

ROVNER: Sebelius also said the administration's crusade against insurance companies hiking premiums was not intended to be a personal attack on the people who work at those health plans.

Sec. SEBELIUS: I am certainly not here to vilify hardworking employees of insurance companies across the country or blame insurance companies for all the problems in our health care system.

ROVNER: But then the message if not the tone shifted. Sebelius warned that if the current effort fails, health insurers could soon find themselves in deep trouble.

Sec. SEBELIUS: Premiums will take even a bigger bite out of Americans' wages. Your market will shrink even further. More Americans will lose their employer-sponsored insurance, and we will have a situation where the market is unsustainable.

ROVNER: But the heart of Sebelius's message was to urge, in a nice way, that the industry shift its lobbying tactics.

Sec. SEBELIUS: Instead of spending energy attacking the parts of the proposal that you don't like, come to the table with strengthening the parts that are there, that you talked about from the beginning are essential to comprehensive reform.

ROVNER: That would mean pulling television ads like this one unveiled just this week.

(Soundbite of television ad)

Unidentified Man #2: Health insurance companies' costs are only four percent of all health care spending. Doctors, hospitals, medicines and tests are the biggest slices.

ROVNER: But industry group head Karen Ignagni insisted her group is eager to support an overhaul of the current system, including major changes in the way insurance is delivered, just not this one.

Ms. KAREN IGNAGNI (President and CEO, America's Health Insurance Plans): And as it stands we're concerned that the legislation now will make costs go up not down.

ROVNER: The insurance industry says one huge problem is that Congress has so far been too timid to adequately punish people who won't buy insurance under the new requirement the bill would impose.

Sec. SEBELIUS: If we have legislation that has de minimis penalties and doesn't include everyone and isn't effectively an incentive for everyone to participate, the people who are left in the pool are the oldest and the ones who have the highest health care costs.

ROVNER: Which would in turn raise premiums for those who do buy insurance. Sebelius invited the industry to offer suggestions to improve the legislation. Ignagni said they would. But time is running short and the White House doesn't seem to be backing off its criticism of the industry.

Julie Rovner, NPR News, Washington. Transcript provided by NPR, Copyright National Public Radio.