White House Calls Increases in Health Insurance Rates Too High
The Obama administration said Thursday that rate increases sought by a health insurance company were unreasonable, and it ordered the insurer to rescind them or justify its refusal to do so.
Kathleen Sebelius, the secretary of health and human services, issued the finding against the carrier, Trustmark Life Insurance Company, a unit of Trustmark Mutual Holding Company.
Ms. Sebelius said that “the excessive rate increases” would affect nearly 10,000 people in Alabama, Arizona, Pennsylvania, Virginia and Wyoming.
“It’s time for Trustmark to immediately rescind the rates, issue refunds to consumers or publicly explain their refusal to do so,” Ms. Sebelius said, wielding power granted by the new health care law.
The action fits in with White House efforts to demonstrate the value of the new health care law and to portray President Obama as fighting for the economic interests of middle-class families in this election year.
Cindy Gallaher, a spokeswoman for Trustmark, based in Lake Forest, Ill., said: “We respectfully disagree with the assumptions and conclusions drawn today by the Department of Health and Human Services. Our premiums are driven by the rising cost and increased utilization of medical services.”
“Trustmark has been and will continue to be in compliance with all aspects” of the law, Ms. Gallaher added.
The law, signed by President Obama in March 2010, set detailed federal standards for health insurance, which had for decades been regulated mainly by the states. The law calls for the annual review of “unreasonable increases in premiums.” Under rules issued last year by Ms. Sebelius, rate increases of 10 percent or more must be reviewed by state or federal officials.