Press Releases

Washington, DC – U.S. Senator Dianne Feinstein (D-Calif.) today announced plans to introduce legislation that would prevent insurance companies from enacting unfair health premium rate increases.

The legislation would create a national Medical Insurance Rate Authority to prevent such increases. Senator Feinstein’s announcement follows news that Anthem Blue Cross would hike premiums for certain policyholders in California by up to 39 percent.

Additionally, a report published Thursday by the US Department of Health and Human Services revealed that health insurance companies have requested dramatic premium hike increases over the past year - for instance, by up to 56 percent in Michigan, 24 percent in Connecticut and 23 percent in Maine - and will likely continue to do so in the future.

Following is Senator Feinstein’s statement:

“I intend to introduce legislation soon to create a Medical Insurance Rate Authority to prevent egregious premium rate increases, like the one recently announced by Anthem Blue Cross of California, which will raise certain medical insurance premiums by up to 39 percent.

This is unconscionable. It places a huge burden on people who are already struggling in these tough economic times, including the estimated 700,000 Anthem Blue Cross policyholders in California.

The insurance industry reaps soaring profits by piling massive financial burdens onto consumers. According to a recent study by Health Care for America Now, America’s five largest insurance companies reported record profits of $12.2 billion in 2009, an increase of $4.4 billion, or 56 percent, from 2008. And WellPoint, the parent company of Anthem Blue Cross, reported earning $2.7 billion in the fourth quarter of 2009.

The Health Care for America Now study also reports that the five largest insurers had boosted enrollment in government-subsidized programs administered by private plans – including Medicare and Medicaid – by 688,000. The study noted that insurance industry executives see ‘great opportunity’ in serving public programs because private purchasers of insurance are being priced out of the market.

After a public outcry over this plan, Anthem Blue Cross has announced that it will delay the rate increases for two months to allow the State Department of Insurance to review their justification for these increases. I will be monitoring the Department of Insurance's investigation.

But it's clear to me that more needs to be done. A two-month reprieve is not enough for families who could lose their health insurance plans if they can't pay the skyrocketing premium costs.

This legislation would empower the Secretary of Health and Human Services to review premium cost increases in states where the Insurance Commissioner does not have the authority, or capability, to conduct such reviews.

Specifically, it would:

  • Require companies to justify unreasonable premium increases, using a process to be established by the HHS Secretary. 
  • Give the Secretary authority to deny or modify health insurance rate increases that are found to be unjustified.  
  • Require the Secretary to determine whether states have the capability to conduct rate reviews.  To assist the Secretary, the National Association of Insurance Commissioners will submit a report that examines current state authority, capabilities, and recent rate review actions.  
  • Establish a Medical Insurance Rate Authority to advise the Secretary. It will have seven members -- two consumer representatives, one insurance industry representative, one physician, and three additional experts.

At least 25 states give their Insurance Commissioners some type of authority to review or regulate premium hikes and other charges, including deductibles and co-payments. California is not one of those states. That needs to change.

Bottom line: affordable health insurance should be a right, not a privilege.  This latest move by Anthem Blue Cross is just another demonstration that the health insurance industry will not change its behavior until it is required to do so.”