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Hi again folks,

As you know, I recently wrote a post here about how health care reform will protect patients’ rights. I read all of your comments and wanted to join in the conversation.

A number of readers shared news of their insurance rates increasing this year. I share this concern, and part of the reason we passed the Affordable Care Act was to finally bring unjustified insurance rate hikes under control by expanding insurance oversight. Unfortunately, insurance rate hikes aren’t a new problem brought on by the Affordable Care Act.

Long History of Insurance Rate Hikes
Millions of Americans, including many of you who are reading this blog, have struggled to deal with rising health insurance premiums for decades.  For small business owners, you may have faced the tough decision of continuing benefits for your employees or no longer offering health insurance.  For others, you may have had your health plan benefits changed and reduced, or your employer may have switched health insurance companies, or not offered raises in order to pay the higher rates dictated by insurance firms.  For families or individuals buying your own insurance, you’ve seen first-hand how offerings have changed, rates have sky-rocketed and your options have dwindled as prices have risen.  Most significantly, these out of control costs left many Americans uninsured over the course of the last two decades.

Insurance premiums have risen at the same time that insurance companies have been reporting record profits.  Between 2000 and 2009, the profits for the ten largest health insurance companies in the nation rose 250 percent.  In 2009, the House Ways and Means Committee prepared the following table about insurance company profits:

Company 1st Half 2010 Profits 1st Half 2009 Profits Change in Profits Chief Executive Officer (CEO) Pay (2009)
United Healthcare $2.31 billion $1.84 billion +25.6 percent $8.90 million
Wellpoint $1.60 billion $1.27 billion +25.5 percent$13.11 million
Aetna $1.05 billion$784 million +34.3 percent $18.16 million
Humana $599 million $487 million +22.8 percent $6.51 million
Coventry$98 million $63 million +57.1 percent $25.65 million

Sources: Second quarter earnings reports for UnitedHealthcare, Wellpoint, Aetna, Humana, Coventry, US Securities and Exchange Commission Filings. *CEO Pay does not include stock options

What we have is a long-term pattern of increased rates, and increased profits for insurance companies at the expense of Americans seeking healthcare.  As the 111th Congress convened in 2008, it had become clear that insurance companies were going to keep increasing rates with abandon unless we took action.  This pattern is an important reason we in Congress passed health care reform.
Affordable Care Act Addresses, Not Causes, Unjustified Rate Hikes
Do health insurance reforms add cost for insurance companies?  The answer is “not enough to justify double-digit rate hikes”.  As we’re seeing now, the US Department of Health and Human Services, along with numerous independent groups, have found that changes mandated by the Affordable Care Act will increase costs by 1 to 2 percent at most this year. If insurance companies were raising rates solely to address changes to the law under the Affordable Care Act, double digit rate hikes would not be necessary.  

Because the Affordable Care Act adds very little to the cost of health insurance, health insurance companies have chosen to exaggerate the impact of the reforms in order to justify their continued rate hikes in this dire economic environment. State regulatory agencies, including in my home state of New York, are finding actual examples of this false blame game, and have called on insurance companies to stop their deceptive practices. On September 23rd, the New York State Insurance Department issued a letter to health insurance CEOs telling them that rate increase notices to consumers have been “deficient, if not misleading”.  

Strengthening Protections for Consumers
Because of the Affordable Care Act, governments and government agencies, such as the New York State Insurance Department, have received the necessary funding and authority to stop unjustified rate hikes.  In New York, the Insurance Department utilized money received from the Affordable Care Act to rigorously enforce a prior approval law and stop unjustified rate hikes on consumers.  On October 12, 2010 and again on October 29, 2010, the New York State Insurance Department announced a series of cuts to proposed rate increases, in one instance bringing down a requested rate increase of 15.9 percent to 6.3 percent.  Said Commissioner Wrynn:

"Because of prior approval, we were able to reduce some rate increase requests significantly – including reductions of about 16 percent," Wrynn said. "We certainly are not happy with even the reduced increases, and we will keep working to keep costs down. But at least we could make sure these increases were justified by the rising cost of health care in New York. We reduced every rate increase request that we found excessive or unreasonable."

New York received the money for this type of review process from an important component of the Affordable Care Act which has provided $46 million to 45 states and the District of Columbia to crack down on unreasonable rate hikes. This money is allowing states like New York to increase the tools at their disposal to ensure rate hikes are justified.  

There is also money allocated to states to specifically help consumers fight any attempts by insurance companies to control their healthcare options or raise their rates.  For example:

Connecticut will be conducting multiple outreach sessions around the state to educate consumers about their healthcare rights.

California will develop a consumer-friendly website and toll-free phone number that consumers can call with questions about health care coverage and receive assistance with the filing of complaints and appeals.

New York will provide consumer assistance to at least 8,000 New Yorkers with their enrollment in coverage and/or their navigation and disputes with insurance carriers.

North Carolina will add staff who will coordinate and deliver services needed by consumers as they transition to new health insurance programs.

These are just a sampling of the programs being put in place by states to help consumers.  For more information, please visit for specific details about programs in your state.

In addition to assisting states, the Affordable Care Act also allows the federal government to have more involvement in the rate review process. In a letter sent to Karen Ignagni, President and CEO of America’s Health Insurance Plans, Secretary of the US Department of Health and Human Services, Kathleen Sebelius, described new enforcement measures aimed at health insurance companies that will take affect this year. Said Secretary Sebelius:

Later this fall, we will issue a regulation that will require state or federal review of all potentially unreasonable rate increases filed by health insurers, with the justification for increases posted publicly for consumers and employers.  We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014. Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.

Finally, the Justice Department filed a lawsuit against Blue Cross and Blue Shield of Michigan charging the insurance company with unfair practices.  While not part of the Affordable Care Act, this action is evidence of the ongoing efforts of the Obama Administration to more vigorously protect consumers against insurance company schemes.  

Unfortunately because of the rising costs of providing care, some rates will rise as we continue to try to bend the cost curve.  We won’t be able to stop the rising costs of healthcare overnight, but the Affordable Care Act is the biggest step to date in bending the cost curve and stopping the egregious unjustified double-digit rate increases seen to date.  

While the Affordable Care Act was under consideration, Harvard economist David Cutler said, “Over the past year of debate, 10 broad ideas have been offered for bending the health-care cost curve. The Democrats' proposed legislation incorporates virtually every one of them.”  For example:

• Health care reform will expand ‘bundled paying’ and ‘valued-based payment’ in which health care providers are paid for outcomes, rather than the number of procedures.

• It will test the effectiveness of payment bundling across the nation in a wide array of settings so we can learn the best way to bundle payments to encourage efficiency and improve quality.

• Investing in information technology in hospitals and at doctors’ offices will save billions of dollars, while expanding coordination and improving quality.

• By fighting Medicare fraud, we’ll cut health care costs even more.  

These reforms, in addition to the protections against health insurance companies, hold the promise of lower costs and more secure care.  Yet, in order for these reforms to be effective, we need your help. If you are concerned about an increase in your rates, there are some important steps you can take.  If you have received a notice of an insurance rate hike, call your State Insurance Commissioner.  You can also see if there are cheaper options in your area on the new website ( If you have questions about provisions of the Affordable Care Act, the Patient’s Bill of Rights, or other measures that can save you money, call your Member of Congress for more information, and explore tools such as this video by the nonpartisan Kaiser Family Foundation to learn more about particular details about the law.

As we approach the beginning of the 112th Congress, we know that we’ve taken the first step, not the last.  Legislation is a tool, but it is not a cure all. When we write and pass legislation, we want to make sure that it works for you. Stay active, stay vigilant, and stay in touch with me and your respective Member of Congress to make sure that we can deliver the affordable secure care you need and deserve.

Originally posted to Rep Louise Slaughter on Wed Nov 10, 2010 at 02:30 PM PST.

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Comment Preferences

  •  I would think the media wants absolutely (3+ / 0-)
    Recommended by:
    chimpy, barbwires, Nulwee

    nothing to do with the truth.  Why can't we get some dems that have a strong back bone and go on the news shows and promote how good this is?

    And tell them all to stay off of FOX!!!

    Republicans===the party of the 1% rich people in America. Or in other words..The Party of NO!

    by jalapeno on Wed Nov 10, 2010 at 02:35:25 PM PST

  •  Excuses (4+ / 0-)

    Regardless, companies are going to blame the government for increases or reduction in benefits to employees.

    Last year our small company enjoyed a 49% increase from BC/BS of South Dakata.  I haven't heard about this year yet, I'm not sure that we've gotten our latest "offer" for next year's coverage yet.

    When the power of love overcomes the love of power, the world will know peace. Jimi Hendrix

    by Dave B on Wed Nov 10, 2010 at 02:35:25 PM PST

  •  I work with someone (12+ / 0-)

    who insists that this year's premium increases are all the fault of the health care bill.  Thank you for helping me set her straight!

    "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

    by Loge on Wed Nov 10, 2010 at 02:37:57 PM PST

    •  "all the fault of" (0+ / 0-)

      There is also the mental health parity bill that raised coverage standards and costs.

    •  Hospital greed and pricing power (1+ / 0-)
      Recommended by:

      has been a problem for several years now.

      There have been loud complaints in the Boston area.

      The German experience:

      "In den zwölf Jahren von 1995 bis 2006 haben sich die Gesundheitsausgaben um 58,5 Milliarden Euro auf 245 Milliarden Euro erhöht", ein Anstieg, der den Mythos von der "Kostenexplosion" früher wie heute als Faktum erscheinen lässt.

      That's about a 2% annual increase.

      The Swiss experience:

      Die durchschnittliche jährliche
      Steigerung der Gesundheitskosten zwischen 2002 und
      2007 beträgt 3,1%.

      Health care costs climbed an average of 3.1% from from 2002 to 2007.

      Die Krankenhauskosten, einschliesslich der ambulanten Behandlung, sind 2007 mit 4,5% deutlich stärker als im Fünf-Jahres-Durchschnitt gestiegen (2,7%). Dabei haben die Kosten der ambulanten Dienstleistungen in den Krankenhäusern seit 2002 mit durchschnittlich 7,1% pro Jahr deutlich stärker zugenommen als diejenigen der stationären Leistungen (1,8% p.a.). Dieser Trend setzte sich auch 2007 fort.

      Hospital costs climbed an average of 2.7% annually from from 2002 to 2007. Outpatient costs at 7.1% and inpatient costs at 1.8%.

      From a document called:
      Kosten und Finanzierung
      des Gesundheitswesens 2007

      Coût et financement du système
      de santé en 2007

  •  why not put a picture to the faces of those CEOs (7+ / 0-)

    Put a picture of their face on a website with how much money they are making.  Show the American people where their health care dollar is going.

    Nobody deserves a 20 million dollar salary.  Think of all of the bonuses and perks too.

    Our message needs to put that out there.

    Republicans===the party of the 1% rich people in America. Or in other words..The Party of NO!

    by jalapeno on Wed Nov 10, 2010 at 02:41:03 PM PST

  •  The Republicans will keep lying about this (11+ / 0-)

    The Republicans will keep pushing the false idea that HCR is causing rate increases, because it serves their attack on HCR.

    The insurance companies will sit back and let the Republicans do their work for them...they'll keep raising premiums, and let the blame get deflected from their greed to the changes that are part of the health care law.

    The louder and clearer our Democratic members, Secretary Sebilius, President Obama, VP Biden and Democratic spokespeople can be, the more of chance we have of calling them on the false attacks.

    Thanks for posting this - it is helpful.

    Once social change begins,it cannot be reversed. You cannot uneducate the person who has learned to read...You cannot oppress people who are not afraid anymore.

    by terjeanderson on Wed Nov 10, 2010 at 02:44:15 PM PST

  •  is there any possibility (8+ / 0-)

    that other states may be able to force rate refunds based on the health care act as North Carolina did?

    It certainly shows that the act doesn't necessarily lead to higher costs, but that our elected officials at the state level do need to be using their offices to get the money out of the insurers.


  •  Thank you for this timely post. (6+ / 0-)

    Earlier today there was a diarist who needed factual assistance to pushback against his employers claim that Obamacare was causing a huge increase in premiums.

    "George RR Martin is not your bitch" ~~ Neil Gaiman

    by tardis10 on Wed Nov 10, 2010 at 02:50:29 PM PST

  •  Dear Rep Louise Slaughter: (5+ / 0-)

    The folks at Daily Kos are very well informed.

    They know that the only way to bring down health care costs is to get rid of the for-profit insurance industry and their hand maidens on Wall Street, who are destroying the US economy.

    No developed nation establishes a corporatist parasite as the foundation of national health care. Only the United States is so deeply depraved to do so.

    Once again, the "law enforcement" endeavors you describe above merely hightlight the fact that you have put untrustworthy criminials with a severe conflict of interest at the helm of our health and our lives.

    Informing us that we can "call the police and file claims" is a terrible message. Believe me.

    The legislation, without single payer, is a disgrace. You have all made the situation far worse.

    Yours truly, Pluto.

    •  Thank you for writing Pluto (6+ / 0-)

      As you may know, I and other House Democrats pushed hard for a public option to be included in this bill to keep costs down. In fact, we were able to pass the public option as part of the original House version of health care reform, but it did not make it out of the Senate.  Even though we were unable to get a public option included in the bill, in its place I think we have a framework that will help control costs for consumers through different tools. Where we need to tweak legislation, from reconsideration of a public option or other changes, we should do so to make sure the health care system does work for all Americans.

      •  single payer (0+ / 0-)

        Mr. Rogers taught us to be better than this.

        by VelvetElvis on Wed Nov 10, 2010 at 03:28:05 PM PST

        [ Parent ]

      •  Thank you for responding (4+ / 0-)
        Recommended by:
        kurt, allep10, tardis10, worldlotus

        You certainly have your work cut out for you.

        With for-profit, corporate conflict-of-interest health care as the foundation of American health, I can certainly see the need for constant law enforcement and consumer protections. It's a shame the money has to be spent on these criminal enterprizes rather than health care, itself.

        As you can see from the thin line respresenting the United States, Americans do not have their health care monitored as well as citizens of more developed nations.

        Again, thanks for the discussion. The numbers never lie.

  •  For Federal Employees (3+ / 0-)

    All of the plans I have looked at talk early on about the impact of the Health Care Legislation on premiums.

    Thanks for bringing out that this is mostly unqualified baloney.

    Democrats give you the Bill of Rights; Republicans sell you a bill of goods!

    by barbwires on Wed Nov 10, 2010 at 03:08:53 PM PST

  •  coventry handles the Mail Handlers federal (6+ / 0-)

    benefits. Why is a government insurance benefit plan tolerating such a huge percentage in CEO compensation? 161 million in profits for a fiscal year and the CEO get $25.6 million?

    We are looking at GEHA as well. We have Fed BCBS and its getting too expensive for us in prescription coverage for our son's type 1 diabetes needs.(hubby is a GS 12 for a year, lost his civilian job just over a year ago) Our co pay for a month of insulin was $92, $70 for test strips, three month supply, via mail order, and temp continuation coverage was $549 a month. His insulin pump is out of warranty but there isn't enough $$ left to order the new one. co pay for that is around 600, but could be 900, not sure.Hope to order the new insulin pump in January when he can go back on our plan and the TCC payments stop. We make good money,but a lot less than we use to, live in a high cost area, and the coinsurance amounts under the FED BCBS plan are pricing us into rationing care for the rest of our family. We had to skip the dentist this fall for the first time in twenty years.  At least we got our son through his last year of college just as hubby was laid off. Applied Materials laid off a lot of people. They wanted to ship all of Human Resources to India as well.Human resources?

    But I will get the medical I need for being over 50 after January 1st with the new HCR rules for preventive things like Mamm's, pap's and colonoscopy which I have put off due to the coinsurance being too high for us with all the other costs from above.

    Update Ca Schools Diabetes Lawsuit to be heard in Ca Supreme Court(unanimous decision)

    by foggycity on Wed Nov 10, 2010 at 03:20:09 PM PST

  •  With all due respect, Congresswoman.... (3+ / 0-)
    Recommended by:
    Pluto, ChocolateChris, tardis10

    ...the problem is that PPACA doesn't levy cost controls on insurance premiums--which was, and is, the no. 1 issue for voters. I care less about fingerpointing than that this is the leading cause of people going uninsured and little has been done to address consumers' costs.

    A new report from Reuters says that one out of every four Americans is now uninsured, mainly because they can't afford the insurance premiums. Most of those folks won't even qualify for the subsidies once they begin in 2014, according to the report, "more than two out of five individuals who are uninsured at some point during the past year had one or more chronic diseases."

    Please don't tell us PPACA was "just the beginning"; instead, tell us of Democratic lawmakers' plans for the "fix it" part of "Pass it, then fix it."

  •  Property and Casualty profits (0+ / 0-)

    are enough to give health insurance CEOs heart palpitations:

  •  In Japan (1+ / 0-)
    Recommended by:

    ...premiums to around $280 a month for the average Japanese family, a lot less than Americans pay. And Japan's employers pick up at least half of that.

  •  Thankful for what we've got (1+ / 0-)
    Recommended by:

    being a capitalist roader myself, its easy to understand why the companies are jacking premiums now while they have the chance - which makes me thankful for the premium hike protections you've noted here and that have been worked into the reform act. at least we have some sort of protection if our state level regulators act. these double digit hikes are outrageous! i'd imagine in the next few years, as more enforcement mechanisms come online - the hikes will be much more reasonable?

  •  Only in America (1+ / 0-)
    Recommended by:

    It is a nightmare to navigate the US health care system which is a shame because when it's working it is actually really good, but when insurers are allowed to operate unregulated (as they have been) it's a nightmare. For example, last year I was covered by Emblem, so when the time came for my annual check up, I picked a doctor off the emblem website to make sure they were in network so there would be no copays or whatever. I go see the doctor, am there for 10 minutes. she draws blood and all of that and I leave. Got a call a few days later saying my lab results were fine. Then I get a bill a few weeks later from Emblem for $1800 for the lab work. When I called to complain they said that yes the doctor you went to was covered but we don't cover the lab. I asked them how I could possibly know that and they said "once the needle goes in your arm, it's your responsibility." I have a different health insurance company now. And the thing is I'm the kind of customer Emblem should be trying to hold on to because I pay the premiums every month but rarely go to doctors.

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