National

Feds can't stop health rate hikes

WASHINGTON — Public outrage over double-digit rate hikes for health insurance may have helped push President Obama's health care overhaul across the finish line, but the new law does not give regulators the power to block similar increases in the future.

And now, with some major companies already moving to boost premiums and others poised to follow suit, millions of Americans may feel an unexpected jolt in the pocketbook.

Although Democrats promised greater consumer protection, the overhaul does not give the federal government broad regulatory power to prevent increases.

"It is a very big loophole in health reform," Sen. Dianne Feinstein, D-Calif., said. Feinstein and Rep. Jan Schakowsky, D-Ill., are pushing legislation to expand federal and state authority to prevent insurance companies from boosting rates excessively.

At least in the short term, regulators will be able to do little more than require insurers to publicly explain why they want to raise rates. Consumer advocates believe that will not be an effective deterrent against such premium increases as the 39 percent hike that Anthem Blue Cross sent some California customers last year.

"The irony here is that it was the Anthem rate increase that breathed new life into the health care bill," said Jerry Flanagan, medical policy director of Consumer Watchdog, a longtime supporter of tougher premium regulation. "But there is nothing in this bill to guarantee that it doesn't happen again."

The lack of muscle is stoking concerns that more rate jumps — and an angry backlash from ratepayers — could undermine support for implementing the whole health care overhaul.

Insurance industry officials say that talk of more regulation is misguided and have urged federal officials to focus instead on containing rising medical costs, which help drive up premiums.

"Politicians are much more comfortable looking at health care premiums," said Karen Ignagni, president of America's Health Insurance Plans, the industry's Washington-based lobbying arm.

Ignagni, as well as some independent health care experts, says policymakers should look at ways to control the amounts that hospitals and other providers charge, although few elected officials have shown much appetite for doing so.

Obama endorsed Feinstein's insurance proposal earlier this year, including it in the health care blueprint he unveiled in February as Democrats were struggling to revive their proposals. But congressional rules prevented Democratic leaders from including the rate-control provision in the final health care package.

  Comments