Senators Question Insurers' Premium Hikes
In 2011, they said, the ACA will require insurance companies to publicly justify premium increases that are deemed unreasonable and requires insurance companies to spend at least 80% of premium dollars on healthcare instead of administrative costs and overhead. By 2014, the ACA will give states and HHS the power to deny participation in insurance market exchanges to plans with a track record of unreasonable premium increases.
"We have and will continue to strongly encourage states and HHS to use their existing authority, as well as the authority created under the ACA to its fullest to ensure that premium increases across the country are justified and communications are honest," they note.
In a statement from America's Health Insurance Plans, press secretary Robert Zirkelbach said that "political attacks won't do anything to make coverage more affordable for working families and small businesses that are struggling in a slow economy.
Several key factors are combining to drive up premium costs, Zirkelbach says. These include price increases for medical services and plus greater use of expensive tests and procedures. In addition, younger and healthier individuals are dropping coverage due to the current economic conditions, meaning that health insurance risk pools are made up of older and less healthy individuals, he says.
And finally, the new healthcare reform law requires that health insurance coverage include a number of benefits that many policies previously did not cover. "Health plans will continue to do everything they can to implement the new law in a way that minimizes disruption and keeps coverage as affordable as possible for individuals, families and employers," Zirkelbach says.
Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at email@example.com.
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