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Obama administration uses health law powers to call out rate hikes in nine states
The Obama administration Thursday demanded that insurers in nine states reduce or publicly justify their proposed rate hikes.
The president’s healthcare reform law allows the government to demand that insurers justify “unreasonable”
rate hikes of 10 percent or more. The law doesn’t give federal regulators the authority to stop the increases however — rate regulation is a state issue — but it does force healthcare plans to publicly justify their actions.
“Thanks to the Affordable Care Act, consumers are no longer in the dark about their health insurance premiums,” Health and Human Services Secretary Kathleen Sebelius said. “Now, insurance companies are required to justify rate increases of 10 percent or higher. It’s time for these companies to immediately rescind these unreasonable rate hikes, issue refunds to consumers or publicly explain their refusal to do so.”
Separately, HHS released a new report showing that in the past nine months since HHS began reviewing proposed health insurance rate increases, health insurers have proposed fewer double-digit rate increases. According to the report, in the last quarter of 2011 alone, states reported that premium increases dropped by 4.5 percent.
A recent survey of health plans by Aon Hewitt found that, for 2011, health plans reported estimated increases due to the health law of 4.7 percent for individual policies, 1.5 percent for small group plans and 0.8 percent for large group plans.
