In light of the recent flurry of media and government attention and criticism aimed at insurance company rate increases (See DM 11910, 11607, 11762), Representative Jan Schakowsky, (D-IL), and Senator Diane Feinstein (D-CA) have introduced companion bills in the House and Senate that would provide for the establishment of a Health Insurance Rate Authority to establish limits on premium rating. The House bill, H.R. 4757, which has 18 co-sponsors, has now been referred to the Committee on Energy and Commerce.

According to the text of the bill, entitled the "Health Insurance Rate Authority Act of 2010" the Public Service Act would be amended to allow the Department of Health and Human Services (HHS) to establish a uniform process for the review of potentially unreasonable increases in rates for health insurance coverage including premiums. States would still be allowed to impose additional requirements on health insurance issuers.

Under the bill, health insurance issuers would be required to submit to HHS and the respective state justification for a potentially unreasonable rate increase prior to implementing the increase. The insurance companies would also be required to post information about the rate increase on their Web sites.
HHS or the respective state insurance commissioner could impose penalties including: denial of the rate increase, modification of the rate increase, ordering rebates to consumers, or other actions. Certain rate increases could be prioritized for review, such as those that would impact large numbers of consumers, rate reviews requested from states, and rate reviews in the individual and small group markets.

"Families and small businesses across the country are facing yet another round of double-digit premium increases," said Rep. Schakowsky in a press release on her Web site. "They deserve to know that someone is looking at those premiums and is empowered to take action to prevent price-gouging and unreasonable increases."

"I recently met with the CEO and President of WellPoint. I found the company's justification for the increased premiums hard to believe," Senator Feinstein stated on her Web site. "It's clear to me that the health insurance industry will not change its behavior unless it's required to do so."

Adapted in part from Rep. Schakowsky and Sen. Feinstein's press releases.

Read more details:

Links: http://schakowsky.house.gov/index.php?option=com_content&view=article&id=2690:excessive-insurance-premium-increases-to-be-a-thing-of-the-past&catid=2:press-releases&Itemid=16

http://www.feinstein.senate.gov/public/index.cfm?FuseAction=NewsRoom.PressReleases&ContentRecord_id=2b4ba5b1-5056-8059-7606-47bef15b614b

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