DeLauro, Colleagues Fight to Protect Consumers from Rising Health Insurance Costs

Washington, DC— Congresswoman Rosa DeLauro (CT-3) joined with 21 of her Congressional colleagues today to introduce the Health Insurance Rate Authority Act of 2010. This legislation will establish a process to review health insurance companies' proposed premium rate increases and would protect consumers against increases deemed to be unfair.

States across the country are facing double-digit insurance hikes, including a proposed 20% increase in Connecticut, and the majority of them do not have the authority to review such changes. To do this, it would create an advisory board to determine the cause of rate increases and to issues recommendations should corrective action need to be taken. The bill would also give the Secretary of Health and Human Services the authority to act on such recommendations.

This is a companion bill to legislation being offered by Senator Feinstein, and builds on the rate review language included in H.R. 3962, the Affordable Health Care for America Act.

"The sky-rocketing costs of health care are threatening to bankrupt our nation, and we must act to protect families from the health insurance companies' appalling behavior. This bill will put a stop the their abuses, and help to regulate an industry that for far too long has acted of their own accord, discriminating against women and people with pre-existing conditions, dropping coverage and denying claims, and hiking premiums, co-pays, and deductibles just because they can," said Congresswoman DeLauro.

"Individuals and businesses have been forced year after year to accept outrageous increases in health insurance premiums, because they have no real power to change the outcome.  Insurers must be forced to explain why they continue to raise prices on consumers at a pace that far exceeds medical inflation; and if they cannot justify rate increases, the consumer's interests should be put first.  This legislation, similar to the bill that Attorney General Blumenthal and I have proposed in CT, is exactly what we need to protect families and businesses from future unjustifiable rate increases," said Kevin Lembo, who leads the Office of the Healthcare Advocate for the State of Connecticut.

A summary of the legislation is below.

The Health Insurance Rate Authority Act would authorize the Secretary, working with states, to establish a uniform process to review insurance rate increases before they go into effect to determine if those increases are unreasonable. Insurance companies must submit proposed rate increases prior to implementation, which would be posted online.

Upon the determination that a proposed rate increase is unreasonable, the Secretary shall take action to protect the consumer, including preventing or modifying proposed rate increases, or ordering rebates. State Insurance Commissioners with the authority and capability to conduct rate reviews will maintain this authority.

The National Association of Insurance Commissioners (NAIC) will assist the Secretary in developing definitions of unreasonable increase and in identifying states in which insurance commissioners have sufficient authority and capability to conduct rate review.

The bill would create the Health Insurance Rate Authority, an advisory board that would help determine unreasonable rate increases and potential avenues for corrective action. The Rate Authority will consist of consumer advocates with knowledge about the insurance industry, medical professionals, health insurance issuers, and individuals with expertise in health finance, economics, and delivery. The Rate Authority will also produce an annual report on premium and other rate increases and other insurance company behaviors.

This legislation would authorize $250 million in formula grants so that states can review insurance policies or provide insurance information to the Secretary. Grants would be up to five million dollars and nothing in this legislation prevents states from imposing additional requirements.