Democrats Demand Insurers Explain Rate Hikes

Posted November 18, 2009 at 3:11pm

Updated: 6:22 p.m.

A bicameral group of Democratic lawmakers led by Rep. Joe Crowley (D-N.Y.) is asking the insurance industry to explain a report that its companies are steeply hiking rates ahead of a health care reform overhaul aimed in part at reining in industry profits.

Eighty-eight House Democrats and 31 Senate Democrats signed on to the Wednesday missive to Karen Ignagni, CEO of industry trade group America’s Health Insurance Plans, asking for a “detailed explanation— of planned rate increases for small businesses reported late last month by the New York Times.

That report found small businesses are seeing premiums jump about 15 percent for next year, a doubling of last year’s increases that some chalked up to pressure on insurers from Wall Street to goose profits ahead of reform. The lawmakers wrote that the rate increases will force employers to choose between slashing benefits or firing workers. The employer-sponsored health insurance of millions of employees and their families is at stake,— the group wrote. “U.S. businesses and hard-working Americans are struggling enough to make ends meet. Clearly, they cannot afford baseless premium hikes. That is why it is so important for you to explain the cause for these premium hikes.—

Sens. Dick Durbin (D-Ill.) and Mary Landrieu (D-La.) spearheaded signature-gathering in their chamber.

In a statement later Wednesday, Ignagni said her group welcomes the chance to explain rising costs. She said the premium hikes match increases in medical costs, a factor she said has been exacerbated in states that have approved new health care taxes and “shifted costs from public programs to the private sector by underpaying providers.—

“This experience underscores the serious concerns we have raised about the potential unintended consequences from new federal legislation that does not bend the cost curve,— she said.