Cigna CEO David Cordani discussed ongoing worries concerning the implementation of Obamacare Friday morning on "Squawk Box."
Cordani cautioned Obamacare and its implementation are a "significant lift" for the country.
Insurers who cater to small businesses under 50 employees will be especially hit because of new base benefit regulations, hence all customers of those carriers could experience large rate increases Cordani said:
ANDREW ROSS-SORKIN: But, David, I'm looking at numbers here. In California, for example, and these are some competitors, Blue Cross is going to be up 26 percent. Aetna 22 percent. Blue Shield up 20 percent. In Maryland, Care First, which is their largest insurer, has proposed 25 percent increases across the board.
DAVID CORDANI: A couple points. First, Cigna's context extends across the industry broadly. Cigna has historically not played in the small employer under 50 business and individual market. These are new markets for us to enter into. I think what you're seeing broadly as we step across the country into 2014 is a couple points. One, the healthcare law puts in place an essential benefit level, or a base benefit level. In many cases that base benefit level is higher than the benefits that the under 50 life employers are buying today. So there's an acceleration in cost but there's more coverage that take place. Two, medical costs are going up on a year over year basis because of the underlying costs of hospitals and physicians.
ANDREW ROSS-SORKIN: But everyone just announced they had such low utilization and yet the premiums continue to go up.
DAVID CORDANI: Andrew, two different points there. So, take the biggest driver relative to those small employers as a higher level of benefit coverage on the essential benefits. For Cigna, put that in context, we had a approximately a 6 percent medical cost trend or increase year over year which was at the low end of the industry range for the first quarter. For last year, in 2012, we had about 5 percent medical cost trend or increase, which was at the lowest end of the industry training. The good news is that flows directly to them in a positive way and helps to make a more affordable and controllable cost outcome, which is really what we're focused on.