Health Plans
e-Newsletter
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

Obama's New Health Insurance Rate Authority Faces Resistance

Joe Cantlupe, February 24, 2010

Creation of a nationwide authority to put a lid on insurance rate hikes is one of the newest elements of President Obama's healthcare reform plan, but the proposal already faces resistance from state insurance officials and the private insurance industry.

Under the plan announced by the White House on Monday, a new Health Insurance Rate Authority would provide federal assistance and oversight for states to conduct reviews of "unreasonable rate increases and unfair practices" of insurance companies. The administration reacted to proposed rate hikes for individual plans around the country, especially a plan by Anthem Blue Cross of California. Anthem's plan, which includes a 39% rate hike, is the subject of a congressional hearing scheduled Wednesday.

However, the White House plan to create the Health Insurance Rate Authority is facing concern among insurance and state government officials, although they acknowledge the specifics of the proposal are still largely undefined.

A top healthcare official of National Association of Insurance Commissioners says the group is ready to oppose provisions of the plan that would overshadow state insurance regulation.

"I think there is some justification setting some standards and having states adopt those standards," says Sandy Praeger, Kansas's insurance commissioner, referring to the Health Insurance Rate Authority proposal. "But we would fight giving up rate approval authority. We don't want to give up authority at the state level. We would like to work with state regulators to come up with some standards, without taking the authority from us."

Robert Zirkelbach, spokesman for America's Health Insurance Plans, opposes the plan, saying it is tantamount to "creation of new federal regulation guidelines on top of what the states have—it just adds to regulatory complexity. "

The White House has not clearly defined the nature of the Health Insurance Rate Authority, according to experts in the field. In a statement, the Obama administration said it would create the new authority to provide "needed oversight at the federal level and help states determine how rate review will be enforced [and] monitor insurance market behavior."

Noting that health insurers submit their proposed premium increases to the state, or the HHS Secretary for review, "The president's proposal strengthens this policy by ensuring that if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates or take other actions to make premiums affordable," according to the White House.

The Obama plan, which is similar to legislation that Sen. Dianne Feinstein, D-CA, has proposed, is an effort to establish uniformity in the system and establish oversight that some states lack, according to Praeger.

Comments are moderated. Please be patient.