Federal Law Proposed To Regulate Health Plan Premium Hikes
U.S. Sen. Dianne Feinstein (D-CA) and Rep. Jan Schakowsky (D-IL) again called for passage of companion bills they've introduced to mandate federal oversight of health plan premiums, saying it's clear now that insurance companies are more concerned about profits than patients.
"I've come to the conclusion that the driving force in this sector of our economy is profits for shareholders; it isn't good coverage for beneficiaries and that's a problem," Feinstein said. "I'm concerned, because we have until 2014 until the exchanges go online and there is nothing to stop these companies from raising premiums further."
Schakowsky singled out WellPoint in California, calling it "the poster child for unbridled greed," because of its attempt earlier this year to raise premiums 39% for the commercial market. "The Secretary of Health and Human Services should have the authority to assure Americans that rates are reasonable," she said. In Illinois, she said, some families face 60% rate hikes this year.
The companion bills the lawmakers have introduced would require health plans to submit rate hikes over a certain amount to the Secretary for review and approval.
A spokesperson from WellPoint could not be reached yesterday for comment.
Feinstein acknowledged, however, that the bills, called the Health Insurance Rate Authority Act of 2010, faces challenges because it needs 60 votes and not all Democrats support it. The concern is that rate regulation should be a state-by-state responsibility, but at present, only 20 states allow their administration the authority for such oversight.
"What the (federal) legislation would do is set up a federal floor, that's a guarantee to the consumer that they will be protected," Feinstein said.
The lawmakers joined Healthcare for America Now, a health consumer activist group, which just published a report lambasting the five largest for-profit health insurance companies for reporting a combined net income of $3.2 billion for the first quarter of 2010.