WASHINGTON| Mon., Apr. 16, 2012 6:41pm EDT (Reuters) — U.S. officials on Monday cited two health insurers for excessive premium increases, under consumer protection rules of President Barack Obama's health care reform law that could soon be nullified by the Supreme Court.
The Department of Health and Human Services called on Assurant Inc.'s Time Insurance Co. and Illinois-based United Security Life and Health Insurance Co. to either offer rebates to customers in six states or rescind premium hikes ranging up to 24%.
"Assurant Health is committed to setting premium rates at a level that will allow us to continue to serve the needs of our customers. We maintain our recent rate filings are actuarially justified and appropriate," Assurant spokeswoman Susan Burkee said in a statement.
United Security had no immediate comment.
The recently announced rate hikes affect about 60,000 individual and small group insurance customers in Arizona, Louisiana, Missouri, Montana, Nebraska and Wyoming.
"These increases are unreasonable for enrollees of these plans," said Gary Cohen, oversight director at the health department's Center for Consumer Information and Insurance Oversight.
The reform law requires insurers to justify premium increases of more than 10% but does not provide the government with authority to rescind those found excessive or unreasonable.
Cohen said the rate changes also failed to meet federal standards requiring health insurers to devote at least 80% of higher premium revenues to health care services. But Assurant said its companies set their insurance rates in order to meet the requirement.
PPACA, which does not come into full force until 2014, is intended mainly as a measure to extend health coverage to more than 30 million uninsured Americans. But the legislation also includes a range of consumer protections and measures to improve care while reducing health care costs.
Twenty-six states and an independent business group have asked the high court to overturn the healthcare law on grounds that it oversteps the authority of the federal government. A ruling, which could overturn the law in part or in whole, is expected by the end of June.
The administration found that Time Insurance's rate hikes in five states were based on unreasonable assumptions by the company. Officials went further with United Security, saying a newly announced premium increase in Arizona was unreasonable and that the company had not even tried to justify it.
© 2011 Thomson Reuters. Click for Restrictions.
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