Crowley-Durbin-Landrieu Call on Insurance Industry to Explain Record Health Care Rate Hikes in 2010

Nov 18, 2009
Insurance premiums set to increase by 15% next year – double the increase in 2009

31 Senators and 88 Representatives send letter asking health insurance companies to answer allegations that they are hiking up rates in anticipation of health care reform


Washington, D.C.
— U.S. Representative Joseph Crowley (D-NY) and U.S. Senators Dick Durbin (D-IL) and Mary Landrieu (D-LA) have spearheaded a letter from 119 Members of Congress asking the health insurance industry to explain the unusually high increases in 2010 health insurance premiums for small business and individuals.  Right now, insurance premiums are set to increase by an alarming 15 percent in 2010 – double the rate of increase in 2009.  Some health care experts are alleging that the insurance industry is raising rates artificially in anticipation of the enactment of Federal health care reform and not as a result of underlying increases in costs. 

“We read with great concern the October 24, 2009 New York Times article, ‘Small Businesses Face Sharp Rise in Costs of Health Care,’ which raised serious allegations about whether insurance companies are raising rates in anticipation of health reform being enacted by President Obama and Congress,” wrote Crowley, Durbin and Landrieu.  “Small businesses are the backbone of the U.S. economy, accounting for approximately 80% of net new jobs created.  During this economic downturn, they cannot be expected to absorb such skyrocketing costs without negative consequences for job creation and business growth. Therefore, we ask that you submit to Congress a detailed explanation of the planned rate hikes.”

Led by Representative Crowley and Senators Durbin and Landrieu, 119 Members of Congress, including 31 Senators and 88 Representatives, have asked America’s Health Insurance Plans (AHIP) to explain the doubling of premium increases for 2010 on behalf of American small businesses and individuals who are struggling to pay for health care insurance (Full text of letter below).  The letter asks the health insurance industry to explain why premiums for America’s small businesses and individuals are scheduled to increase by a whopping 15 percent in the coming year.  Additionally, the members ask AHIP to respond to allegations raised in an October 24th, 2009 New York Times article titled, “Small Businesses Face Sharp Rise in Costs of Health Care,” that the 2010 rate hikes are being fueled by speculation that the enactment of health care reform will have a negative impact on company profit margins.

FULL TEXT OF LETTER CALLING FOR AHIP EXPLANATION FOR UNUSUAL HEALTH CARE PREMIUM INCREASES FOR 2010

November 18, 2009

Karen Ignagni
President & CEO
America’s Health Insurance Plans
601 Pennsylvania Ave
South Building, Suite 500
Washington, DC, 20004

Dear Ms. Ignagni,

We read with great concern the October 24, 2009 New York Times article, “Small Businesses Face Sharp Rise in Costs of Health Care.” The article raises serious allegations about whether insurance companies are raising rates in anticipation of health reform being enacted by President Obama and Congress.  Small businesses and hard-working Americans deserve to know why they will be subjected to such unusual and significant increases in health care premiums, and we ask that you submit to Congress a detailed explanation of the planned rate hikes.

As you know, next year, health care providers are proposing to increase premiums for customers across the country by an alarming 15 percent—double the rate of increase from last year. For America’s small businesses, this means the annual premium per employee will have risen from $4,500 in 2008 to $5,500 in 2010 – an increase of $1000 per employee in just two years.  Small businesses are the backbone of the U.S. economy, accounting for approximately 80% of net new jobs created.  During this economic downturn, they cannot be expected to absorb such skyrocketing costs without negative consequences for job creation and business growth.

Already, the number of employers providing insurance to their workforce is slipping.  For example, over the last ten years, the percentage of small businesses (with fewer than ten workers) offering health benefits has dropped from 56 percent to 46 percent. If we continue on the current path, U.S. businesses – large and small – will have to choose between reducing benefits or making layoffs in an effort to stay competitive with foreign competitors.  Without health care reform, small employers are on track to pay nearly $2.4 trillion for health care in the next 10 years.  As a result, one in five employers is expected to stop offering health benefits within the next five years.  The employer-sponsored health insurance of millions of employees and their families is at stake. 

U.S. businesses and hard-working Americans are struggling enough to make ends meet. Clearly, they cannot afford baseless premium hikes.  That is why it is so important for you to explain the cause for these premium hikes.  We look forward to your response and to getting to the bottom of this issue.

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