Health insurance industry group disputes need for new rate review rules Posted: January 24th, 2011

America's Health Insurance Plans (AHIP), an industry group representing 1,300 health insurers, says a recently announced Department of Health and Human Services regulation that requires insurers who raise premiums by more than 10 percent to publicly defend the need for the rate hike fails to recognize market conditions and puts the federal government in an oversight role better suited for states.

In a Dec. 21 statement, AHIP President and CEO Karen Ignagni says, "the public policy discussion on health care costs has focused on health insurance premiums, while ignoring the root causes that are driving up the cost of coverage, including soaring medical prices, new benefit mandates and changes to health plans' risk pools."

According to the AHIP, the new rule, which begins in 2011, ignores dramatic increases in the cost of health care. For example, the group points to California data that shows the price for a hospital stay has increased 150 percent from 2000 to 2009. In addition, data from Oregon shows health service costs have increased on average more than 10 percent annually.

Ignagni says, "…states are best suited to review premiums because they have the experience, infrastructure and local market knowledge needed to ensure that consumers are protected and health plans are solvent."