Insurers Would Get Tens of Millions of New Customers Under Reform, and Owe Americans a Break From Audacious Rate Spikes by Anthem Blue Cross and Others
Consumer Watchdog called on President Obama to impose a national freeze on health insurance rates before health reform takes effect to protect consumers from premium hikes like the 39% increase recently announced by Anthem Blue Cross in California. The rate freeze is one of five tools Consumer Watchdog urged the president to include as part of his proposed fixes to the Senate health care bill.
"Insurance companies that have spiked their rates in advance of the passage of health reform must offer families a breather on rates in return for gaining tens of millions of new customers. Given the audacity of health insurance rate increases last year and this year, and with the economy in deep recession, only federal legislation can curb the spiral of unaffordability. A rate freeze is critical to hold prices in check until new consumer protections have time to take effect," said Carmen Balber, Washington Director for Consumer Watchdog.
The group outlined five must-have consumer fixes that will allow the Department of Health and Human Services ("HHS") and the states to protect consumers from insurer abuses including unjustified rate hikes that the President should include in the reconciliation bill to follow House passage of the Senate health care legislation.
1. Freeze health insurance rate increases. Freeze health insurance rates—including premiums, deductibles and copays—at current levels until a state or HHS institutes robust health insurance rate regulation. (See No. 2)
2. Require effective rate regulation. Expand on the modest rate regulation requirements of the Senate bill to:
* Require prior approval of rate changes by state regulators
* Guarantee the public's right to intervene to further reduce rates
* Increase federal grants to states for development of "prior approval" regulations
* Publish strong federal fallback regulations to take effect in states that do not adopt effective prior approval regulation
* Require consumer premium refunds if rates that have already gone into effect are later found to be excessive