Obama Warns Health Insurers on Rate Hikes

by Mike Hall, Jun 22, 2010

Health insurance companies should not use the new heath care reform law as an “opportunity to enact unjustifiable rate increases,” President Obama warned today at a White House ceremony marking the 90-day anniversary of signing the landmark bill, which he termed “a true patient’s bill of rights.”

The warning came a day after a report by the Kaiser Family Foundation (KFF) showed that health insurers are raising prices by an average of 20 percent for working-age adults who are not covered on the job and who buy their own policies.

At the ceremony attended by health care and consumer advocates, insurance company executives, lawmakers and everyday Americans who already have benefited from the law’s changes, Obama said:

Some insurance companies tried to raise rates even before we passed the law, even though some of them were making record profits. Earlier this year, for example, more than 800,000 Anthem Blue Cross customers in California opened their mail to see that their premiums would go up by as much as 39 percent. My administration wanted to know why. People’s wages aren’t going up 39 percent, and the company’s expenses didn’t rise by 39 percent.

Facing mounting pressure, Anthem Blue Cross withdrew the rate hikes. Now says Obama:

The CEOs here today need to know that they’re going to be required to publicly justify unreasonable premium increases on your websites, as well as the law’s new website—healthcare.gov. As we set up the exchanges, we’ll be watching closely, and we’ll fully support states if they exercise their review authority to keep excessively expensive plans out of their insurance exchanges.

Under the law’s new rules issued today by the U.S. Department of Health and Human Services, Obama said the insurance companies’ “worst abuses will be banned forever.”

Beginning Sept. 23, insurance companies can no longer:

• Deny coverage for children based on pre-existing conditions;
• Rescind or take away coverage based on an unintentional mistake on an application;
• Set lifetime limits on coverage; or
• Restrict their use of annual limits.

The new rules also ensure consumers can choose the primary care doctor or pediatrician they want from a plan’s provider network, see an OB-GYN without needing a referral and receive out of network emergency care without prior approval. By the time law is fully implemented, it will extend coverage to an estimated 32 million uninsured Americans. Click here for a five-page fact sheet on the health care reform law.

You can find frequently asked Affordable Care Act questions here and find updates from administration officials here. Sign up for e-mail updates on the health care reform law here.

Several brochures and other resources are available, too, including:

• The $250 Medicare prescription drug “donut hole” rebate, here.
• Young Adult Coverage Fact Sheet, here.
• How to use a new Internet portal to help individuals and small businesses identify insurance options in their state, here.

Click here to find out about health care reform’s impact on various communities, including African Americans, Latinos, women, small businesses, Asian Americans and Pacific Islanders, Americans with disabilities, the LGBT community and veterans.

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