Secretary Sebelius calls on insurance company to drop unjustified rate hikes
U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that health insurance premium increases in Arizona have been deemed unjustified under the rate review authority granted by the Affordable Care Act.
"Thanks to the Affordable Care Act, consumers in every state are getting a straight answer from insurance companies who raise their rates by 10 percent or higher," said Secretary Sebelius. "It’s time for this company to immediately rescind these unjustified rate hikes, issue refunds to consumers, or publicly explain their refusal to do so."
Since the rate review program began in September 2011, health insurers have proposed fewer double-digit rate increases. Furthermore, more states have taken an active role in reducing rate increases, and consumers in all states are getting straight answers from their insurance companies when their rates are raised by 10 percent or more.
In the decisions announced today, HHS determined, after independent expert review, that one insurance company has failed to justify a proposed rate increase in Arizona’s individual association plan market. The excessive rate hikes would affect 340 Arizonans.
The insurer has requested rate increases of 16.7 and 20.1 percent. These increases were reviewed by independent experts to determine whether they are reasonable. In this case, HHS determined that two rate increases were unjustified, because the insurer failed to provide adequate data for a review.
Most rates are reviewed by states and many states have the authority to reject unreasonable premium increases. Since the passage of the health care law, the number of states with this authority increased from 30 to 37, with several states extending existing “prior authority” to new markets.
This initiative is one of many in the health care law to ensure that insurance companies play by the rules, prohibiting them from dropping coverage when a person gets sick, billing consumers into bankruptcy through annual or lifetime limits, and, soon, discriminating against anyone with a pre-existing condition.
Information on the specific determinations made today is available at: http://companyprofiles.healthcare.gov/
A comprehensive report on the rate review program is available at: http://www.healthcare.gov/law/resources/reports/rate-review03222012a.html