WASHINGTON BUREAU — Senate Democrats are asking federal regulators to try to do something to slow 2011 Medicare supplement insurance rate increases.
Senate Majority Leader Harry Reid, D-Nev., joined with Sen. Max Baucus, D-Mont., and Sen. John Kerry, D-Mass., to send a letter about Medigap rate increases to U.S. Secretary of Health and Human Services Kathleen Sebelius.
Reid, Baucus and Kerry were responding to reports that United of Omaha Insurance Company, a unit of Mutual of Omaha, Omaha, Neb., have increased Medigap premiums by as much as 40% for some enrollees.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, Washington, defended Medigap issuers, saying rate increases are driven “by the soaring cost of underlying medical care.”
“Medigap is highly regulated and premium rates are reviewed and approved by the insurance commissioners in every state,” Zirkelbach says.
Most states have adopted a model developed by the National Association of Insurance Commissioners, Kansas City, Mo., that already calls for state approval of rate increases, Zirkelbach says.
Reid and colleagues say the United of Omaha increases “raise serious concerns about premium-setting practices and rate review procedures in place for Medigap policies.”
Medigap premiums are rising at a time when Medicare Advantage
premiums appear to be declining, the senators say.
“As you know, the Affordable Care Act establishes an annual review process for premium increase for health insurance coverage and provides $250 million in funding to states so they can engage in meaningful rate review,” the senators write in the letter to Sebelius. “While this rate review does not apply to Medigap plans, we request that you work with governors and state insurance commissioners to help them gain this authority where it does not exist today.”
The senators also are asking for a study of Medigap trends and costs.
CLARIFICATION: In the original version of this article, we described the scope of United of Omaha Medigap increases in an incomplete fashion. The 40% rate increase will apply to about 1% of United of Omaha Medigap enrollees. The enrollees affected bought coverage while an earlier rate increase request was pending regulatory approval, the company says.