NU Online News Service, March 8, 4:04 p.m. EST

WASHINGTON–The Obama administration, moving again to put the spotlight on health insurers, asked five large carriers to publicly disclose their justification for large rate increases.

In a letter sent to the insurers today, Kathleen Sebelius, secretary of the Department of Health and Human Services, asked the insurers to "publicly justify" their requests for large rate hikes, which in California would mean a 39 percent increase in rates for the individual and small group market.

The letter was sent to the CEOs of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc.

It is consistent with the requests Ms. Sebelius made at a meeting in the White House with the CEOs last week.

"Last Thursday, I asked CEOs to post online the actuarial justification for premium hikes so consumers can see why their premiums are skyrocketing," Ms. Sebelius said in the letter.

Now, she added, "it's time for these insurance company CEOs to do their part to make the system more transparent for the American people.

"If insurance companies are going to raise rates, the least they can do is tell us why," she said.

The administration is basing its criticism on a new analysis by Goldman Sachs which found that competition in the insurance market is so weak, insurance companies can continue to raise rates even if it means losing customers.

The analysis cited by the administration found that "price competition is down" and that "incumbent carriers seem more willing than ever to walk away from existing business."

President Obama also cited the investment note in a speech in suburban Philadelphia today designed to promote support for his health care reform legislation as the House prepares to vote on Obama-crafted legislation that contains much of what was passed by the Senate last Christmas eve.

In the letter to the insurers, Ms. Sebelius asked them to include in their response 10 specific types of data.

These include estimates on medical cost and utilization increases, the assumptions driving these estimates, and the basis for those assumptions.

If the premiums increase more than estimated medical costs, she seeks a description of what accounts for those differences; the number of people who will be receiving premium increases; as well as the number of people who will be receiving different levels of premium increases, further broken down by characteristics including plan type, age and sex.

The letter also requested data on the medical loss ratios resulting from any premium increases; enrollment changes in different plans since the past year; and the number of people on whose experience the rate increase is calculated.

It also sought data on any premium rating variation including rating variation by age and health status.

Special Reports /

Disclose Rate Hike Rationale, Health Secretary Tells 5 Insurers

Related Stories

Recommended For You