Top Senate Dems blast insurance industry for 'unnecessary' premium hikes

Leading Senate Democrats on Monday slammed the nation's biggest insurers for hiking premiums and blaming the increases on the new healthcare reform law.  

Sens. Max Baucus (D-Mont.), who heads the Finance Committee, and Jay Rockefeller (D-W.Va.), chairman of the Commerce panel, are calling on the companies to justify the premium hikes, some of which have crept into double digits following enactment of the law.  

Those increases, the lawmakers wrote to WellPoint, UnitedHealth Group, Aetna, Health Care Services Corp., and CIGNA, are "unnecessary" and "unjustified" in the face of reports that the companies are also churning large profits.

"Rather than look to throw consumers a life line, early reports indicate that some carriers are looking to raise rates even further in 2011, while blaming the patient protections in the Affordable Care Act for these cost increases," the lawmakers wrote. "This is irresponsible and unacceptable but is not, unfortunately, surprising."

The letter comes just a week after Health and Human Services Secretary Kathleen Sebelius delivered a similar message to America's Health Insurance Plans (AHIP), the industry's lobbying group, warning that the White House will have "zero tolerance" for "misinformation and unjustified rate increases." 

"I want AHIP's members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections."

The insurance companies have defended their premium hikes, arguing that simple economics dictate that consumers will have to pay more to get more benefits. 

While Baucus and Rockefeller concede that some hikes might be necessary to comply with new consumer protections found in the law, those increases, they argue, should be in the neighborhood of 1 or 2 percent.

"If an insurer thinks it can blame the enactment of the Affordable Care Act for its rising premiums," they wrote, "it is surely mistaken."