HHS Says Trustmark’s Proposed Premium Hike Is ‘Unreasonable’

On Thursday, HHS concluded after an independent review that proposed premium increases from Trustmark Life Insurance in Alabama, Arizona, Pennsylvania, Virginia and Wyoming are "unreasonable," Modern Healthcare reports. The increases would affect 10,000 residents.

Beginning September 2011, insurers were required under the federal health reform law to justify premium rate increases of 10% or more.

Gary Cohen, acting director of oversight at CMS' Center for Consumer Information and Insurance Oversight, said the company is seeking to increase rates by 13% (Zigmond, Modern Healthcare, 1/12).

HHS Secretary Kathleen Sebelius said, "It's time for Trustmark to immediately rescind the rates, issue refunds to consumers or publicly explain their refusal to do so."

However, Cindy Gallaher, spokesperson for Trustmark, said, "We respectfully disagree with the assumptions and conclusions drawn today by [HHS]. Our premiums are driven by the rising cost and increased utilization of medical services" (Pear, New York Times, 1/12).

The federal government has no authority to force insurers to rescind their rate increases, the Washington Times reports. According to the Times, some states can reject unreasonable rate increases, but the federal government only can publicize which insurers it believes want to raise premiums too high.

This is the second instance in which HHS has publicly identified an insurer seeking to raise premiums by more than 10%. In November 2011, HHS called on Everence Insurance to rescind its proposed increase of 11.6%. The company never responded with action (Cunningham, Washington Times, 1/12).