Health Care Reform

Health Reform Advocates Press for Federal Authority to Roll Back Premium Hikes

WASHINGTON–(ENEWSPF)–May 10 – Sixty-three health reform and consumer groups are throwing their support behind legislation that would empower a new federal watchdog to stop unreasonable health insurance premium increases.

Just days after federal and state officials announced an investigation of the nation’s largest insurer, Wellpoint, for their failure to properly justify 39 percent rate hikes in California, 63 national and state groups, representing labor, consumer, businesses, women, and health care providers signed a letter (PDF) that endorses legislation to strengthen federal oversight authority, the Health Insurance Rate Authority Act of 2010 (S.3078/H.R.4757) sponsored by Sen. Dianne Feinstein (D-CA) and Rep. Jan Schakowsky (D-IL).

“Just as the federal government is preparing to implement strong, pro-consumer and small business reforms, insurers are exploiting gaps in some states’ consumer protection laws to boost premiums at the expense of consumers and small businesses,” the letter states.

“The fact that 63 leading health reform and consumer groups have signed on in support of the Health Insurance Rate Authority Act of 2010 illustrates why this legislation is so important. We cannot sit by and do nothing as health insurers continue to impose exorbitant rate increases on working families while taking in billions in profits. We must give the Secretary of the Department of Health and Human Services the ability to review health insurance premium increases and ensure that they are reasonable. Passage of this legislation is my number one priority.” Sen. Feinstein said on Monday.

Larry McNeely, Health Care Advocate for the U.S. Public Interest Research Group, explained why he launched the sign-on letter: “The big insurers are trying to saddle families and businesses with massive premium hikes, using shoddy justification, just before new rules taming their misbehavior are set to go into effect. This bill will put a stop to that.”

Rep. Schakowsky noted that people in her state are currently “left totally exposed to the outrageous insurance rate hikes we’re seeing across the country.”

“Some Illinois residents are looking at a 60% hike this year, yet our Director of the Illinois Department of Insurance, with whom I work closely, has no authority to do anything about it. By allowing the Secretary of Health and Human Services to block egregious rate increases at the federal level, this legislation would serve as a backstop to protect the individuals, families and small businesses that are currently facing crippling rate increases and live in the 26 states with no authority to push back,” she added.

Intended to build on the newly enacted health reform law’s protections for families and businesses, the Health Insurance Rate Authority Act of 2010 establishes a federal rate review agency with the power to disallow unreasonable premium hikes and force insurers to rebate unjustified increases back to consumers.

Currently 26 states lack the authority to stop unjustified increases like those proposed by Wellpont’s California Anthem Blue Cross. The new rate authority would backstop state regulators and could step in if states do not crack down on unjustified increases.

The legislation was the subject of vigorous debate at an April 20 hearing of the Senate Health, Education, Labor and Pensions Committee. However, the joint letter released expresses unified support for the legislation, saying: “No individual or small business should have to rely on the word of their insurers that their rates are fair when the stakes for patients and their families are so high.”