DeLauro Statement on Secretary Sebelius Letter to Health Insurance Plans on Rate Hikes

Washington, DC – Congresswoman Rosa L. DeLauro (CT-3) made the following statement today in response to HHS Secretary Kathleen Sebelius' letter to America's Health Insurance Plans (AHIP), the national association of health insurers, calling on their members to stop using scare tactics and misinformation to falsely blame premium increases for 2011 on patient protections in the Affordable Care Act.

"Once again health insurance companies are trying to mislead the American public. Their recently proposed high rate increases are a blatant attempt to gouge American families before the new reforms take effect," said DeLauro. "I am pleased that the Affordable Care Act provides the Secretary with new tools to make these companies put their customers before exorbitant profits."

For the full text of the Sebelius letter, click here.

The Wall Street Journal reported last week that some health insurance companies are asking for total premium hikes topping 20% starting this month. Any potential premium impact from the new consumer protections under the Affordable Care Act will be minimal. HHS estimates that the effect will be no more than one to two percent. This is consistent with estimates from the Urban Institute (1 to 2 percent) and Mercer consultants (2.3 percent), as well as some insurers' estimates. Pennsylvania's Highmark, for example, estimates the effect of the legislation on premiums from 1.14 to 2 percent.

HHS has provided 46 states, including Connecticut, with resources to strengthen the review and transparency of proposed premiums. Later this fall, HHS will issue a regulation that will require state or federal review of all potentially unreasonable rate increases filed by health insurers. HHS will also keep track of insurers with a record of unjustified rate increases; these plans may be excluded from health insurance Exchanges in 2014.

The agency is also certifying guidelines to accurately calculate the medical loss ratio – another part of the Affordable Care Act that will ensure these companies put their customers first, this time by dedicating at least 80% of their premiums to medical care rather than CEO bonuses and administrative costs not associated with delivering a high level of care.