The Associated Press - Mar. 9, 2010:

Insurance industry executives sat down with administration officials in the White House last week to justify their rising premium costs, attributing them to increasing medical costs.

But it’s an answer President Barack Obama apparently wasn’t buying. In his weekly Saturday address, he said insurance companies "couldn’t give me a straight answer as to why they keep arbitrarily and massively raising premiums."

Insurance executives tell it another way. After they spent an hour making the case that pharmaceutical manufacturers, hospitals, medical device companies and other medical service providers are driving costs upward, there was no commitment from the administration to include more stringent cost-control measures in the president’s reform bill, attendees said.

On Friday, Karen Ignagni, president of America’s Health Insurance Plans, said in an interview that she thinks some lawmakers have given up on including more robust cost controls in favor of delaying action.

"I don’t agree with that because what we’re seeing today [in premiums] reflects ... exploding costs. And for Congress to walk away, first to decry the issue of increases now and then to walk away and ... not to do something about it, not to take that opportunity, I think that’s wrong," Ignagni said during a taping of C-SPAN’s "Newsmakers."

Ignagni’s comments came one day after Health and Human Services Secretary Kathleen Sebelius called the heads of Aetna, UnitedHealth, WellPoint, Cigna and Health Care Service Corp. to 1600 Pennsylvania Ave., which has become the epicenter of anti-insurer sentiment in Washington. But instead of explosive drama, the meeting was marked by "constructive dialogue," according to some participants.

"No one looked at [Sebelius] and said, ‘Why are you beating up on [insurers]?’" said a meeting attendee.

Obama, Sebelius, congressional Democrats and progressive advocacy groups have spent the past few weeks pounding insurers over their double-digit premium increases. The progressive coalition Health Care for America Now put out a report last week attempting to debunk the claim that premium increases stem from medical cost increases, which AHIP dismissed as "disinformation."

Both sides seemed to understand the politics of the situation and tried to make their best cases in the face-to-face meeting. But, mostly, the two groups seemed to talk past each other, attendees said.

The one bit of intrigue came when Obama dropped in for an orchestrated moment via anecdote. The president read a letter he had received from Natoma Canfield, who saw her premiums increase by 40 percent this year. She asked Obama to keep fighting for reform.

The White House later released a picture of Obama reading the letter, and press secretary Robert Gibbs tweeted, "Ms. Canfield amazed Pres would read her letter bet she had no idea he’d read it to the CEO who raised her rate 40%."

"The president made his comments, and he turned to me and I got a chance to make a few statements. And those statements really centered around recognizing the challenge working families face and just encouraging us to have the kind of thoughtful dialogue we were having," said Chief Executive Ronald Williams.

UnitedHealth CEO Stephen Hemsley said Obama "was open to input with respect to constructive ideas around cost and how to address the issue of covering American families in a more sustainable way."

Williams said Democratic reforms still don’t do enough to control costs. The meeting would have been more constructive, he said, had it included chief executives from the industries that are driving up the costs and reaping more profits than insurers.

Ignagni said her industry should not be vilified nor be expected to be the only one to pay for reform.

"To hear the conversation now turn only and exclusively to our industry— as if this is the only place we’re going to see, or should see, any reform — it just defies credulity," she said.

Health care experts have also argued that Obama’s proposal would not effectively control skyrocketing health care costs. Obama’s move to weaken a tax on high-cost insurance plans at the behest of the labor unions essentially neutered the last significant Democratic attempt at cost controls. (Not surprisingly, AHIP opposes the so-called Cadillac tax as a way to control rising costs.)

But White House officials have argued that the president’s tax is indexed at a rate lower than traditional health care cost increases, which means more insurance plans very likely would be subject to the tax, forcing insurers to offer cheaper plans and driving down costs.

Other cost controls in Obama’s bill include an independent Medicare payment advisory board, administrative simplification, comparative-effectiveness research and proposals to cut waste, fraud and abuse in Medicare and Medicaid, officials said.

Ignagni said her group will continue to share data to make its case that rising medical costs and the decision of healthy people to drop coverage in a tough economy are the causes of rising insurance rates.

"We never give up," she said. "The issue of cost is something that members of Congress can’t ignore."