Obama Cabinet Secretary: 'The Private Market is in a Death Spiral'

February 29, 2012 - 11:49 AM

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Health and Human Services Secretary Kathleen Sebelius (CNSNews.com/Penny Starr)

(CNSNews.com) – Health and Human Services Secretary Kathleen Sebelius told the House Ways and Means Committee on Tuesday that the days of private health insurance are coming to an end in the United States.

“The private market is in a death spiral,” Sebelius said, contending this would be the case whether or not President Barack Obama's health care law had been enacted.

At the Ways and Means hearing, Rep. Peter Roskam (R-Ill.) asked Sebelius about the administration’s assurances that people who liked their current health insurance plan would be able to keep it under the new law.

“How about when the president said you can keep your health care coverage, if you like it?” Roskam said. “And yet, the reality is, according to Bloomberg (News) at least, 9 percent fewer businesses are offering medical coverage than in 2010. There the rhetoric didn’t meet the reality, did it?”

Sebelius did not contest the numbers.

“Well again, congressman, what you’re seeing, it wouldn’t have mattered if we had passed the Affordable Care Act or not,” she said. “The private market is in a death spiral.”

Under President Obama's health-care law, all Americans will be required to purchase a government-approved health-care plan and those earning under 400 percent of the poverty level will be eligible for a federal subsidy to do it.

Later on Tuesday, in an address to the American Cancer Society’s Cancer Action Network, Sebelius discussed the “broken” health insurance system that Obamacare aims to fix.

Sebelius said that the next “important step” in implementing the president's health care plan is to establish “essential health benefits”--the basic package of coverage that the federal government will order all health insurance plans to cover.

The Affordable Care Act outlines 10 areas of basic coverage, including preventive services, prescription drugs, pediatric care and hospital services. The "preventive services" area is the one under which the administration has already ordered that all health insurance plans must cover sterilizations and all FDA-approved contraceptives, including those that induce abortions, without charging any fees or co-pay to insured workers and their dependents.