Just days after HHS Secretary Kathleen Sebelius warned insurers against using the early benefits in the health care law to justify unreasonable premiums increases, Sens. Max Baucus (D-MT) and Jay Rockefeller (D-WV) have written to the CEOs of WellPoint, UnitedHealth Group, Aetna, Health Care Services Corp., and CIGNA, saying insurers are “mistaken” if they believe they can continue to blame double digit premium increases on reform.” “This level of misinformation is not acceptable,” the two write, pointing out that the early benefits should not increase costs by more than 2 percent on average:
And if an insurer thinks it can continue to impose double-digit premium increases, while providing fewer health benefits and enjoying record surpluses, it is again mistaken. There have been too many reports of insurance companies imposing insurance premiums increases at will with little oversight or public accountability. We are committed to ensuring that premium increases are fair and justified. [...]
We have and will continue to strongly encourage states and HHS to use their existing authority as well as the authority created under the Affordable Care Act to its fullest to ensure that premium increases across the country are justified and communications are honest. We will continue to work toward ensuring that the federal and state governments have the necessary resources and authority to review potentially unjustified premium increases and to hold insurance companies accountable.
Baucus and Rockefeller pledge that they “are committed to ensuring that consumers are treated fairly and will closely examine any potentially misleading communications to consumers,” but there is actually little the federal government can do — outside of publicly shaming insurers or passing a federal rate review law — to hold insurers accountable.
As Sebelius explained today, “it’s a real catch-22. The law assumes that states will regulate rates, that that’s the best marketplace. This is really a state-based bill…only if they abdicate that responsibility or say that they don’t want to participate do we have kind of the back-up responsibility.”
For ways the federal government can pressure states to hold down unreasonable rates, click here.