FOR IMMEDIATE RELEASE
February 18, 2010
Contact: HHS Press Office
Sebelius Unveils New Report on Requested Premium Increases in States Across the Country
Report Highlights Requested Rate Hikes in Connecticut, Maine, Michigan, Oregon, Rhode Island, Washington
U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius today unveiled a new report, Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System. The report highlights health insurance premium increases in states across the country and comes shortly after Anthem Blue Cross announced plans to raise rates on its California customers by as much as 39 percent, even after its parent company took in a profit of $2.7 billion in the previous quarter. The complete report is available at www.HealthReform.gov.
“Over the last year, America’s largest insurance companies have requested premium increases of 56 percent in Michigan, 24 percent in Connecticut, 23 percent in Maine, 20 percent in Oregon, and 16 percent in Rhode Island, to name just a few states,” said Sebelius. “Premium increases have left thousands of families that are already struggling during the economic downturn with an unpleasant choice between fewer benefits, higher premiums, or having no insurance at all. Hard-working families deserve better.”
The report examines requested insurance premium increases and notes:
- Anthem of Connecticut requested an increase of 24 percent last year, which was rejected by the state.
- Anthem in Maine had an 18.5 percent premium increase rejected by the state last year as being “excessive and unfairly discriminatory” – but is now requesting a 23 percent increase this year.
- In 2009 Blue Cross Blue Shield of Michigan requested approval for premium increases of 56 percent for plans sold on the individual market.
- Regency Blue Cross Blue Shield of Oregon requested a 20 percent premium increase.
- UnitedHealth, Tufts and Blue Cross requested 13 to 16 percent rate increases in Rhode Island.
- Rates for some individual health plans in Washington increased by up to 40 percent until Washington State imposed stiffer premium regulations.
Health insurance reform will fix our insurance system, help drive down costs, put consumer power and choice in the hands of the American people, and ensure all Americans receive the health care services they need. Reform will:
- Place additional oversight on health insurance companies to ensure that people get value for the premiums they pay. Insurance companies will have to report how they spend the premium dollars that they collect from their customers. If they spend too much on administrative costs and profits, they will have to give some of that money back to their customers. Insurance companies will also have to provide public justification for premium increases. Consumers can use this information to help decide whether they want to purchase a particular plan. And if insurance companies are not able to justify their premium increases, they could be barred from participating in the health insurance exchanges.
- End Arbitrary Limits Placed on Coverage by Insurance Companies. Under health insurance reform, families will no longer face lifetime limits to their benefits, nor will coverage be denied or watered down based on medical history. As a result, health insurance will provide real protection from high health care costs.
- End Insurance Company Discrimination. Health insurance reform will prevent any insurance company from denying coverage based on underlying health status, including genetic information. It will end insurance discrimination that charges families more if a family member has or had any illness, and limit differences in premiums based on age.
- Create Competition Among Insurers with a Health Insurance Exchange. Health insurance reform creates an “exchange” or marketplace for insurance competition that will drive down premium prices for Americans. The health insurance exchange will bring families and plans together into one organized marketplace so families can compare prices and health plans in order to decide which quality, affordable option is right for them. Health insurance reform will guarantee every American a choice of health coverage, even if someone loses a job, switches jobs, moves, or gets sick.
- Ensure Value in Our Health Care System. By rewarding high-quality and efficient care, encouraging care coordination, and reducing medical errors, health reform will slow the growth in health care costs and ensure value for every health care dollar spent.
- Lower Premiums. The Congressional Budget Office estimates that reform will streamline administrative costs of insurance companies and bring more people into the insurance market, lowering premiums of a comparable plan in the individual market by 14 to 20 percent. That means more money in the pockets of American families, and the security of having high-quality coverage.
“Premium hikes in California and across the country are a wakeup call,” added Sebelius. “It’s time for Congress to pass reform and hand control over health care decisions back to American families and their doctors.”
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Last revised: May 7, 2011