Insurers will have to justify rate increases over 10 percent

[cal04]

Insurers will have to justify rate increases over 10 percent
by Joan McCarter
http://www.dailykos.com/story/2011/05/20/977716/-Insurers-will-have-to-justify-rate-increases-over-10-percent?via=blog_1


Amid numerous reports of massive rate increases, and profits, for health insurance companies in the new Affordable Care Act universe, the Obama administration is demanding that insurers begin justifying proposed rate increases in September of this year.

Kathleen Sebelius, the secretary of health and human services, issued a final rule establishing procedures for federal and state insurance experts to scrutinize premiums. Insurers, she said, will have to justify rate increases in an environment in which they are doing well financially, with profits exceeding the expectations of many Wall Street analysts.

“Health insurance companies have recently reported some of their highest profits in years and are holding record reserves,” Ms. Sebelius said. “Insurers are seeing lower medical costs as people put off care and treatment in a recovering economy, but many insurance companies continue to raise their rates. Often, these increases come without any explanation or justification.”

Federal health officials proposed the 10 percent threshold in December. The insurance industry criticized it as an arbitrary test that could brand a majority of rate increases as presumptively unreasonable. But the administration rejected the criticism and insisted on the 10 percent standard in the final rule, issued Thursday.

Beginning in September 2012, the government will set separate thresholds for the states, depending on health care and insurance costs in those states. In the meantime, insurers will have to abide by the 10 percent threshold. Note that it doesn't mean insurers can't increase premiums above 10 percent, but that they will have to justify those increases. Insurers, of course, don't like it and say that the rule will do nothing to "address the underlying costs of health care, which they described as the main factor driving up premiums." Which does deflect from the issue of insurance company profits.


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[Enrique]

1. not September of this year

She says September 2012.

And a question I have about this and other provisions. What happens when a republican becomes president? Their HHS Secretary can simply drop this requirement? What's written into the law and what isn't?

[bbinacan]

8. HHS can't require this

so it's a moot point.

[dkf]

2. I thought the states controlled insurance regulation.

Did they change that?

[abelenkpe]

3. A ten percent rate increase

would hurt too. Won't insurers just raise rates 9.99 percent year after year then?

[Journeyman]

4. Since I began my own business two decades ago, our health insurance has gone up 20% each year. . .

I hate to say it, but I'd find a 9.99 percent increase welcome relief. There's nothing to justify even that much, in my opinion, but until the government gets serious about Single Payer guess I'll have to settle for whatever little help I can get.

[MannyGoldstein]

5. Ten percent is insane - should be no greater than the overall inflation rate

10% increase per year means doubling price every 7 years.

Another wet kiss to the insurers.

[murphyj87]

6. Health care costs in Canada........

Health care costs in Canada rise at a rate of between 5% and 6% a year. The only reason that health costs rise so much faster in the United States is the administrative costs of the insurance run and insurance rationed health care that Americans are saddled with. Once you decide not to let insurance company bureaucrats make your medical decisions and to ration your health care based on income and profit, and you decide to eliminate insurance companies, your health costs will be like ours, 5% to 6% increase per year.

[jtuck004]

7. Why don't we just get rid of 10% of the insurance companies every year?

We would be much better off.