U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius has written to governors and state insurance commissioners urging them to re-examine any WellPoint health insurance rate increases in their states. She took this action after Anthem Blue Cross, a WellPoint affiliate, withdrew its plan to raise premiums in California by as much as 39 percent when auditors found the rate hikes were based on unreasonable assumptions.
“For too long in this country, Americans have been at the mercy of insurance companies, and have ended up paying a steep price,” said Sebelius. “Using faulty assumptions and loopholes, insurers have tried to game the system and consumers have ended up with one bad deal after another. In recent days and weeks, with the passage of the Affordable Care Act and some strong actions on the parts of states from Maine to California, the balance of power is starting to shift toward the American people.”
In February, Sebelius sent a letter to Anthem Blue Cross, calling on the company to publicly justify its proposed 39 percent premium increase in California. Anthem recently withdrew its plans for the premium increase in California after the California Department of Insurance found that the proposed rate increase was based on unreasonably high assumptions about the rate at which medical costs are increasing.
Sebelius’ letter to governors and state insurance commissioners urged them to not only check WellPoint’s assumptions, but also to work with local and state leaders to ensure they have the authority to review and approve insurance rate increases before they take effect.
“Even small errors can mean unaffordable premiums for policyholders,” stated Sebelius in the letter. “I…encourage governors and insurance commissioners to follow California’s example and check the math on rate increases being proposed in their states and to ensure they have the strong regulatory tools they need to fight unreasonable increases.”