Are health insurance rates a state or federal matter of approval?
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I read this story today: "The Obama administration is asking Anthem Blue Cross to justify its plans to raise health insurance premiums…"
"Health and Human Services Secretary Kathleen Sebelius sent a letter to the company’s president on Monday calling the planned increases extraordinary and difficult to understand. She wrote that the company has an obligation to provided a detailed justification for the rate hikes to the public."
I thought that health insurers were state regulated and regulated by the NAIC–not the Secretary of Health and Human Services.
Anthem is in California if that makes a difference.
Rates are filed in each STATE, not federally, except for Medicare.
The obvious conclusion is, that the Obama administration has no idea how health insurance companies work.
5 Responses to “Are health insurance rates a state or federal matter of approval?”
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April 3rd, 2010 at 8:25 pm
oh, their CA activities are regulated in CA ok — and if Anthem is selling insurance to Federal employees under a contract with GSA, then Ms. Sebelius may legitimately have something to say about the proposed price increases.
For Anthem’s part, if they dislike her actions or opinions too much, they’re always free to cease selling to Federal employees.
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retired banker
April 3rd, 2010 at 8:40 pm
Health insurance is indeed regulated at the state level, as you believe. California regulates with a light hand – there have been plenty of abuses by the insurance companies, especially in the non-group (individual) market.
I found an article in the LA Times (online). I think that Sec. Sebelius is trying to raise the news profile of Anthem’s action to national visibility, in support of health insurance reform. She doesn’t talk about HHS taking any action, but instead says:
"I am aware that the State of California is investigating this matter, and urge Anthem Blue Cross to cooperate fully. In the meantime, I will be closely monitoring the situation."
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April 3rd, 2010 at 9:26 pm
Rates are filed in each STATE, not federally, except for Medicare.
The obvious conclusion is, that the Obama administration has no idea how health insurance companies work.
References :
April 3rd, 2010 at 10:10 pm
You are correct. As a human being, Obama is "asking", not requiring, them to do something voluntarily. This is no different than if I call a store and "ask" them to tell me why they close at 6 instead of 7. Being President does not give him the authority to make them justify the plans, but it does not take away the right that anyone, including him, has to "ask". Similarly, anyone including you, me, or Secretary Sebelius can send a letter saying that the plans are extraordinary and difficult to understand. She is not regulating them, anymore than you or I would be "regulating" them if we sent a letter complaining about their plans.
The only problem I see is with the use of the word "obligation", because it could be interpreted to mean that she is saying the federal government requires it (which is false). However, it could also be interpreted to mean "morally obligated" or "ethically obligated", which would be true.
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April 3rd, 2010 at 10:18 pm
insurance is regulated on the state level. every state has its own dept. of insurance. (since 1945)
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