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Sebelius Warns Insurers that Rate Hikes Could Lead to Government Review



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Starting in 2011, insurers who serve the small group or individual markets and who raise rates by 10 percent or more will need to disclose and publicly justify the rate increases, announced Health and Human Services secretary Kathleen Sebelius today.

In states with review policies for insurers already in place, the rate review will be conducted locally, according to the proposed HHS regulations. If there is no policy in the state, the HHS will handle the review.

While the HHS lacks the authority to ban rate increases, the department clearly hopes the public pressure will force insurance companies to forgo hikes deemed excessive. In addition, beginning in 2014, Sebelius can refuse to allow an insurer participate in the government-run state health care exchanges President Obama’s health-care legislation creates.

“Year after year, insurance company profits soar, while Americans pay more for less health care coverage,” Sebelius said in a statement. “The Affordable Care Act is bringing unprecedented transparency and oversight to insurance premiums to help reign in the kind of excessive and unreasonable rate increases that have made insurance unaffordable for so many families.”

In February, a month before the health-care law was passed, President Obama unsuccessfully pushed lawmakers to add language allowing U.S. government officials to prohibit insurance companies from raising rates to levels considered unreasonable.



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