Feds to Health Insurer: Rate Hikes Unreasonable? Carry On.

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Federal health insurance regulators announced yesterday that the health insurance company Trustmark is trying to impose unreasonable rate hikes – that will mean multiple premium increases this year adding up to over 27% for some patients – on nearly 10,000 thousand people in 5 states.

The federal health reform law requires review of premium increases of 10% or more. Health and Human Services Secretary Kathleen Sebelius said: “Today, we’re using this tool to protect consumers and crack down on unreasonably high rate increases.”

We're glad that HHS is opening some health insurers' books and proving that rates are too high. But are those ten thousand patients really about to see their health insurance prices go down? Not at all. Just because HHS determined the increase was unreasonable, doesn’t mean anyone has the power to stop it.

The health reform law failed to give either federal or state regulators any authority to block unreasonable rate increases. Sebelius publicly condemned the unreasonable rate hike – but Trustmark has every intention of raising rates anyways.

35 states have some power to publicly review and reject unreasonable rate increases, but not the states where Trustmark is imposing this unreasonable hike, and not California.

At Consumer Watchdog’s campaign affiliate, Consumer Watchdog Campaign, the presses are rolling as I write to print the first batch of official ballot initiative petitions to qualify the "Insurance Rate Public Justification and Accountability Act" for the November California ballot. It will make health insurers publicly justify premium increases, under penalty of perjury, before they take effect.

We learned last week that health insurance premiums rose 153% in the last decade in California, while inflation rose at just one fifth of that rate. It's never been clearer how badly insurance companies are ripping us off.

The initiative will make health insurance companies prove their price hikes in public. When they can’t, we won’t have to pay.

Carmen Balber
Carmen Balber
Consumer Watchdog executive director Carmen Balber has been with the organization for nearly two decades. She spent four years directing the group’s Washington, D.C. office where she advocated for key health insurance market reforms that were ultimately enacted into law as part of the Affordable Care Act.

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