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.

HHS Secretary Kathleen Sebelius questioned the GOP’s promise to repeal the health care law, arguing that the party has no alternative for coving the 50 million Americans who went uninsured in 2009 or the ability to make up for the deficit reductions achieved by the law. Speaking this morning at a National Journal event to commemorate the six months since President Obama signed the reform bill, Sebelius also predicted that repealing the law will become less popular, as “millions of Americans” “will be receiving direct benefits from the passage of the law”:

SEBELIUS: By January there will be millions of Americans who will be receiving direct benefits from the passage of the law…I think the question is, and go back to what? Leaving 50+ millions Americans with no health care coverage, with rates continue to dramatically increase year-in and year-out with no safety net system. With no focus on the future. And with frankly an increase in the deficit that according to the Congressional Budget Office the implementation of this bill will reduce the deficit by $100 billion in the first 10 years and by close to a trillion in the second 10 years. [...]

What is the alternative? …There was never really an alternative put forward…but no strategy about what to do about the now 50 million Americans that are uninsured. No real strategies about cost control and containment. No strategies about how to go after fraud. All of the ideas that were put on the table were essentially incorporated. So I think there has got to be a realism about this debate.

Watch it:

To be fair, the GOP did offer and vote on a reform alternative that would have covered just 3 million people and actually lead to an increase in the number of uninsured. But Sebelius touches on an important reality. While the GOP may find some ways to defund certain parts of the health care law, they won’t be able to repeal it outright: they won’t have the votes, the offsets to pay for the deficit savings, or the public support. Consider this: according to the latest CBS News/NYT poll, 40% of Americans say they support repealing the health care law. But when told that repeal would allow insurance companies to exclude people with pre-existing conditions, support fell to just 19%.

As the benefits set in, reform will grow less popular and the GOP will have to stand up to its base. After all, it’s one thing to speak exclusively to conservative activists in a midst of a political campaign, but once the GOP is in charge, they will have to govern for the entire country. And telling millions of Americans that they will be taking away the law’s consumer protections and pre-existing conditions exclusions is not a good way to retain power. As Collin Powell put it yesterday, once you’re in power, “You can’t just say ‘no’ to everything. You can’t just sit around beating up the President.”

Of course, that’s not to say that the law won’t need to be amended or improved. At today’s event Sebelius predicted that the law will likely evolve, just like Medicare did after 1965. “Will the bill need fixing along the way? You bet,” she said. “You know, Medicare today looks little like it did when my dad in 1965 was a member of Congress and voted for Medicare. … It doesn’t work exactly like it did in 1965. It’s changed and developed along the way and I think that’s the framework possibility that we have.”

Speaking this morning at the National Journal’s Empowering Conversations series, HHS Secretary Kathleen Sebelius — who last week warned insurers against using the early benefits in the health care law to substantially increase premium rates — pointed to two actuarial estimates which found that the early benefits could increase costs gradually by “1 to 2 percent.” Still, Sebelius conceded that insurance premiums will continue to increase. “Well, I think the rate increases are likely to be somewhat substantial,” Sebelius admitted, agreeing that the poor economy will continue to force healthier individuals to leave the risk pool and increase costs for everyone else:

SEBELIUS: The cost trends and their practice is fairly substantial and it has little to do with the passage of the Act. It has to do with their market place. And frankly there is some justification in saying that one of the issues that has hit companies in the economy — again particularly in the individual market where people are out purchasing on their own — is that healthy folks drop their coverage when the economic squeeze occurs. If you are sicker of have a sicker family member you don’t have that luxury, so you’re keeping it. So their own risk experience is becoming more expensive. So what we have to do is get healthier people back into the marketplace.

Watch it:

Sebelius did argue that insurers often overstate their premium requests. “I was in the state legislature in Kansas for eight years. And year after year after, when legislatures would consider some sort of a mandated benefit, companies would testify to dramatic rate increases as a result,” she explained. “Year after year after year, that turned out to be absolutely factually incorrect. It was never justifiable and frankly in most cases they didn’t do it at all.”

Sebelius also explained that the burden of the rate review will fall to the states, where the jurisdiction of state insurance commissioners “varies dramatically.” “It’s a real catch 22,” she said. “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.”

The Department of Health and Human Services is also preparing medical-loss ratio (MLR) regulations that would require insurers to spend 80 to 85% of premium dollars on health care costs. Sebelius said she hoped to define “health care spending” in the next month and implement the remainder of the regulation by the end of the year. The regulation — which requires insurers that don’t meet the ratio to issue rebates for the difference — is fully implemented by 2012.