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Life Health > Health Insurance > Health Insurance

Sebelius to AHIP: Enough with the Letters, Already

By Allison Bell

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U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius says the Obama administration will take action if health insurers continue to blame 2011 rate hikes on the Affordable Care Act.

The Wall Street Journal ran an article earlier this week in which a reporter noted that a few health plans said the new Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA), will cut their costs this year, but that many others said PPACA would increase their costs.

The reporter quoted Karen Ignagni, president of America’s Health Insurance Plans, Washington, as saying that adding benefits mandates increases health plan costs.

Sebelius, a former Kansas insurance commissioner and former president of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., now has written to Ignagni to say that she has heard that “several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act.”

“I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases,” Sebelius says in the letter.

“We will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections,” Sebelius says.

The Affordable Care Act ban on lifetime coverage limits, restrictions on rescissions, and requirements that plans that provide dependent coverage offer dependent coverage to adult children up to age 26 will take effect Sept. 23, Sebelius says. New preventive care requirements, such as requirements that plans cover many common vaccinations without imposing deductible or co-payment rules, also will be taking effect, she says.

But experts expect the effects of those provisions on 2011 premiums to be less

than 1% to 2%, Sebelius says.

In Pennsylvania, for example, Highmark Inc., Pittsburgh, estimates the changes will increase its costs by 1.14% to 2%, Sebelius says.

“Any premium increases will be moderated by out-of-pocket savings resulting from the law,” Sebelius adds.

HHS officials have been using Affordable Care Act provisions to strengthen state insurance rate review efforts, and the department will be issuing a regulation that will “require state or federal review of all potentially unreasonable rate increases filed by health insurers, with the justification for increases posted publicly for consumers and employers,” Sebelius says.

“We will also keep track of insurers with a record of unjustified rate increases,” Sebelius says. “Those plans may be excluded from health insurance exchanges in 2014.”

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