Dem lawmakers want answers on health insurance rates


November 18, 2009
Karen Ignagni
President & CEO
America’s Health Insurance Plans
601 Pennsylvania Ave
South Building, Suite 500
Washington, DC, 20004
Dear Ms. Ignagni,
We read with great concern the October 24, 2009 New York Times article, “Small Businesses Face Sharp Rise in Costs of Health Care.” The article raises serious allegations about whether insurance companies are raising rates in anticipation of health reform being enacted by President Obama and Congress.  Small businesses and hard-working Americans deserve to know why they will be subjected to such unusual and significant increases in health care premiums, and we ask that you submit to Congress a detailed explanation of the planned rate hikes.
As you know, next year, health care providers are proposing to increase premiums for customers across the country by an alarming 15 percent—double the rate of increase from last year. For America’s small businesses, this means the annual premium per employee will have risen from $4,500 in 2008 to $5,500 in 2010 – an increase of $1000 per employee in just two years.  Small businesses are the backbone of the U.S. economy, accounting for approximately 80% of net new jobs created.  During this economic downturn, they cannot be expected to absorb such skyrocketing costs without negative consequences for job creation and business growth.
Already, the number of employers providing insurance to their workforce is slipping.  For example, over the last ten years, the percentage of small businesses (with fewer than ten workers) offering health benefits has dropped from 56 percent to 46 percent. If we continue on the current path, U.S. businesses – large and small – will have to choose between reducing benefits or making layoffs in an effort to stay competitive with foreign competitors.  Without health care reform, small employers are on track to pay nearly $2.4 trillion for health care in the next 10 years.  As a result, one in five employers is expected to stop offering health benefits within the next five years.  The employer-sponsored health insurance of millions of employees and their families is at stake.
U.S. businesses and hard-working Americans are struggling enough to make ends meet. Clearly, they cannot afford baseless premium hikes.  That is why it is so important for you to explain the cause for these premium hikes.  We look forward to your response and to getting to the bottom of this issue.