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Sebelius berates health insurers

Health and Human Services Secretary Kathleen Sebelius told health insurers to stop using scare tactics and falsely treating the Patient Protection and Affordable Care Act as an excuse for premium rate hikes. She recently heard that some health insurers sent letters to their enrollees blaming premium increases for 2011 on patient protections in the Affordable Care Act.

"There will be zero tolerance for this type of misinformation and unjustified rate increases," she wrote in a letter to Karen Ignagni, the president and CEO of America’s Health Insurance Plans.

The letter to AHIP was the latest salvo in a PR war surrounding the Patient Protection and Affordable Care Act. Insurers say it's to blame for the rate hikes. 
The letter went out a day after the Wall Street Journal reported that some carriers were asking to jack up their total premiums by more than 20 percent this month.

As election season approaches, the administration is trying to protect the Affordable Care Act's reputation from the taint of something as anti-consumer as significantly higher rates than they projected. 

Several of the new protections under the health reform law go into effect on Sept. 23. The administration estimated that those benefits would raise premiums no more than 2 percent.

Despite Sebelius' position, the industry's top lobbyist wouldn't back down. Ignagni told Associated Press that the new healthcare law is one of several factors driving premium prices up. "It's a basic law of economics that additional benefits incur additional costs," she said.

This fall HHS plans to issue a regulation to require state or federal review of all potentially unreasonable rate increases filed by health insurers. Those that get a reputation for unjustified rate increases may be not be allowed to participate in the health insurance exchanges in 2014. "Simply stated," wrote Sebelius, "we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections."

To learn more:
- read Wall Street Journal article and Atlantic article on insurers hiking rates
- read the HHS press release
- read the Wall Street Journal article and Associated Press article on Sebelius' reaction

Related Stories:
Sebelius demands Anthem explain its 'extraordinary' premium hikes
Anthem Blue Cross gets OK for lower rate hikes

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