Obama Admin to Insurance Commissioner:  Reconsider Anthem Rate Hikes

Mike Solis

After awarding Connecticut $1 million to oversee future rate actions, the Obama Administration is asking insurance commisioner Thomas Sullivan to rethink the recent rate hikes of as much as 47 percent by Anthem Blue Cross and Blue Shield.

Jay Angoff from The U.S. Department of Health and Human Services’ director of Consumer Information, sent to Connecticut Insurance Commissioner Thomas Sullivan.

On August 12, 2010, the department gave a $1 million grant to Connecticut “to improve oversight of insurance company rates and to strengthen its ability to determine whether proposed rate increases were excessive.”

The letter said that they were surprised that Sullivan would allow such a large rate action, “without holding a public hearing, without having tested or validated the proposed rates and the assumptions underlying those rates.”

The letter went on to say that “the CID’s approval of the rate increase is particularly troubling in view of Anthem’s acknowledgment that three of the major consumer protections of the Affordable Care Act - prohibiting lifetime limits, prohibiting insurers from cancelling coverage, and requiring insurers to offer dependent coverage to young adults until age 26 - would increase costs by only 0.2 percent. Similarly, another major insurer in Connecticut has acknowledged in its own rate filing that health insurance reform would raise costs by a total of only 1 percent, an estimate consistent with that of Hewitt Associates, the impact analyses of these provisions published in the Federal Register, and those of other insurance industry experts. The Affordable Care Act cannot be used to justify this huge rate hike and, in fact, includes provisions to empower states to shed light on and guard against this type of excessive insurer behavior.