Dem bill would let HHS block premium hikes

By Sam Baker - 03/06/13 05:24 PM ET

Democrats in the House and Senate reintroduced a measure Wednesday that would allow the federal government to block "unreasonable" increases in healthcare premiums.

Rep. Jan Schakowsky (D-Ill.) and Sen. Dianne Feinstein (D-Calif.) introduced the bill, which they also sponsored in the 112th Congress. It would allow the Health and Human Services Department to block "unreasonable" premium increases.

Some states have the power to reject proposed rate increases, but the federal government doesn't.

“In California and 14 other states, consumers continue to face unreasonable health insurance rate hikes,” Feinstein said in a statement. “Regulators in these states lack the authority to block or modify these unjustified increases in the individual and small group markets, even when they are found to be excessive."

President Obama's healthcare law gave HHS the authority to review certain rate increases, but the department can't do anything to stop them from taking effect.

The insurance industry opposes federal rate review, arguing that premiums only increase when underlying healthcare costs rise.