Thursday, January 06, 2011

Mid-week update

The Centers for Medicare and Medicaid Services actuary issued his annual report on national health care spending. To no one's surprise, the health care spending ruler continues to bend up. The Wall Street Journal explains that "health spending took a greater share of the economy— up one percentage point from 16.6% in 2008—because gross domestic product shrank 1.7% in 2009." America's Health Insurance Plans' President Karen Ignani commented that "health insurance premiums continue to grow at a slower rate than spending on medical benefits."

In a puzzling development, Department of Health and Human Services Secretary Sebelius moved the Office of Consumer Information and Insurance Oversight ("OCIIO") from her office over to CMS. OCIIO was established early last year to implement the Affordable Care Act.   National Underwriter reports that the first OCIIO Director Jay Anhoff (previously Missouri insurance commissioner and a plaintiffs' lawyer) has become a special assistant to the HHS Secretary.  OCIIO's name will be changed to the Center for Consumer Information and Insurance Oversight (CCIIO), which us a much less catch acronym. The CCIIO will be led by CMS Principal Deputy Administrator Marilyn Tavenner. The Hill reports that Ms Tavenner was Virginia's Secretary of Health and Human Services in the Governor Tim Kaine administration from 2006 through early last year.

Modern Healthcare reports that "Health insurers' outlook continues to be negative as the sector faces new regulations [created by the Affordable Care Act and CCIIO), heightened political pressure and a weak economy, which are expected to squeeze earnings, one major ratings agency [Moody's] said.  Insurance Networking News describes theses circumstances as a "perfect storm" confronting insurers.""Overall, we expect that these challenges will exert negative pressure on the credit fundamentals and ratings of health insurers into the foreseeable future," [Moody's Sr. Vice President Stephen] Zaharuk says, "however, our view continues to be that the larger and more diversified companies will be better positioned to meet the challenges the industry faces." Fun times.

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