Sebelius Warns Insurers Not To Blame Rate Hikes on Federal Reform Law

HHS Secretary Kathleen Sebelius, in a letter sent on Thursday to America's Health Insurance Plans, wrote that the Obama administration will not tolerate insurers' attributing premium increases to the health reform law and spreading "misinformation and scare tactics" about the overhaul, the AP/Boston Globe reports (Alonso-Zaldivar, AP/Boston Globe, 9/10).

The letter is a response to several premium increases proposed by insurers that blame a large portion of the hikes on the reform law.

Some insurers are asking for increases of more than 20% and attributing between one and nine percentage points of the increases to mandates in the overhaul, the Wall Street Journal reports (Adamy, Wall Street Journal, 9/10).

Sebelius noted that the reform law justifies only "minimal" rate increases of "no more than one to two percent" (Pecquet, "Healthwatch," The Hill, 9/9).

She warned that insurers could be excluded from the new health insurance exchanges created by the reform law in 2014 if they continue to blame larger increases on the overhaul.

Such a ban would block insurers from as many as 30 million potential customers.

Karen Ignagni, president of AHIP, said that the reform law is not the only reason for premium increases but added that it does contribute substantially to additional costs.

She said, "Health insurance premiums are increasing because of soaring prices for medical services, the impact of younger and healthier people dropping their insurance during the weak economy and additional benefits required under the new law."

Ignagni added, "It's a basic law of economics that additional benefits incur additional costs" (AP/Boston Globe, 9/10).