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Virginia Insurance Provider to Defy HHS Ruling

Ernie Shannon's picture
Trustmark health insurance provider

The heavy hand of the Affordable Care Act of 2010 is being felt around the country today.

Health insurance premium increases have been ruled excessive in five states by Health and Human Services (HHS) Secretary Kathleen Sebelius. The company hit with the ruling, however, pledges to defy the federal government’s decision.

The secretary’s power to oversee individual health insurance company premiums comes from the new health care program approved by Congress two years ago. It authorizes the federal agency to step in when premium increases are deemed to be “unreasonable.” Sebelius said, “Before the Affordable Care Act, consumers were in the dark about their health insurance premiums because there was no nationwide transparency or accountability. Now, insurance companies are required to disclose rate increases over 10 percent and justify these increases.”

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The most recent company targeted by Health and Human Services is Trustmark Insurance which sought to raise premiums in five states. According to the agency, “Trustmark has raised rates by 13 percent in Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. For small businesses in Alabama and Arizona, when combined with other rate hikes made over the last 12 months, rates have increased by 27.2 percent and 18.1 percent, respectively.”

In response to the HHS move, Trustmark spokesman Patton Hollow talked to Kaiser Health news and said company officials “respectfully disagree with the government’s assumptions and conclusions and would go ahead with the rate hikes. Our premiums are driven by the rising cost and increased utilization of medical services. As a smaller carrier, our loss ratios can vary significantly from year to year and we take that volatility into consideration.”

Hollow continued, “. . . the company will continue to be in compliance with all aspects of the health law. If there are instances where we do not reach the required loss ratio as calculated under the federal regulations, we will promptly . . . rebate the difference to those customers.”

In the HHS release of its decision regarding Trustmark, the agency also pointed out that individual states have the power to restrict health insurance rate increases. As examples, New Mexico denied a request from Presbyterian Healthcare for a 9.7 percent rate hike; Connecticut stopped Anthem Blue Cross Blue Shield from hiking rates by a proposed 12.9 percent; Oregon denied a proposed 22.1 percent rate hike by Regence; and the state of New York halted an 8.2 percent increase by Emblem, Oxford, and Aetna. And there are more.

Sources: U. S. Department of Health and Human Services, www.hhs.gov
Capsules the KHN Blog