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Senators Question Insurers' Premium Hikes

Janice Simmons, for HealthLeaders Media, September 22, 2010

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 jsimmons@healthleadersmedia.com.

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3 comments on "Senators Question Insurers' Premium Hikes"


Todd Madden (9/24/2010 at 2:58 PM)
As long as private insurance and more specifically EMPLOYERS continue to have to subsidize hospitals for the underpayment by Medicare and Medicaid, carriers WILL continue to raise premiums. I contend they will raise them in at an even FASTER rate after the passage of this bill. Why? Because there will be more people on both gov't programs. If carriers want to slow increases in raising rates, offer international options for surgery. JCI Accredited hospitals don't have to deal with a cost shift like US facilities do.

Bogey (9/22/2010 at 3:03 PM)
This is not called "ACA," but rather, "PPACA" (PACK uh).

Anonymous (9/22/2010 at 10:30 AM)
The letters sent by Secretary Sebelius and the two Senators to insurance companies clearly constitute a violation of free speech - "stop telling your members that you are raising insurance rates because of PPACA OR ELSE...". The purpose of the Bill of Rights is precisely to avert this kind of action by government officials (imagine: "stop publishing opposition leaders in your newspaper OR ELSE..."). They should expect lawsuits.