Kirsten Gillibrand United States Senator for New York

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Gillibrand Takes Action To Prevent Health Insurance Companies From Hiking Premiums Before Health Reforms Take Effect

New Measures Would Give HHS Secretary Immediate Authority to Review Any Premium Increases, Crack Down on Insurance Company Abuses, Protect Consumers

April 22, 2010

Washington, DC – Mere weeks after President Obama signed health insurance reform into law, insurance companies are searching out loopholes to find ways to raise premiums before insurance reforms go into effect. U.S. Senator Kirsten Gillibrand is taking action and authoring new protections for consumers by preventing insurance companies from issuing baseless, exorbitant rate hikes.

“We have to take additional steps to ensure that health insurance companies do not hike their rates before the health care bill goes into effect,” Senator Gillibrand said. “For too long, insurance companies have profited off the backs of New York families and small businesses.  Now, as we are finally going to lower costs for consumers, insurance companies may be trying to game the system.”

Senator Gillibrand is working with Senator Tom Harkin (D-IA), Chairman of the Health, Education, Labor and Pensions (HELP) Committee and Senator Dianne Feinstein (D-CA) on new legislation that would immediately give the Health and Human Services (HHS) secretary the authority to review premiums and block any premature or unjustifiable rate increase.

Specifically, the new regulations would authorize the HHS secretary to work with states to establish a uniform process to review insurance rate increases before they go into effect if those increases are unreasonable. Insurance companies would be required to submit proposed rate increases before implementing them and post them online.

The HHS secretary would work with the National Association of Insurance Commissioners to determine if a proposed rate increase is unreasonable, take action to prevent or modify the rate increase, or order rebates. State insurance commissioners with the authority and capability to conduct rate reviews would do so. 

Additionally, the legislation would establish the Health Insurance Rate Authority, an advisory board to determine unreasonable rate increases and ways to crack down. The Rate Authority would also produce an annual report on premium and other rate increases, and other insurance company behaviors.

The legislation would authorize $250 million in formula grants of up to $5 million each to give states the resources they need to review insurance policies or provide insurance information to the HHS secretary.