Health and Human Services Secretary Kathleen Sebelius has written to governors and state insurance commissioners urging them to re-examine any WellPoint health insurance rate increases in their states.
The letter comes after Anthem Blue Cross, a WellPoint affiliate, withdrew its plan to raise premiums in California by as much as 39 percent when auditors found the rate hikes were based on unreasonable assumptions about the rate at which medical costs are increasing.
"For too long in this country, Americans have been at the mercy of insurance companies, and have ended up paying a steep price," said Sebelius. "Using faulty assumptions and loopholes, insurers have tried to game the system and consumers have ended up with one bad deal after another."
"I urge that, to the extent you have authority to do so, you re-examine any WellPoint rate increases in your state to determine whether any mistaken assumptions similar to those made in California were made in your state," the letter read. "Even small errors can mean unaffordable premiums for policyholders."
Sebelius is urging governors and state insurance commissioners to not only check WellPoint's assumptions, but also work with local and state leaders to ensure they have the authority to review and approve insurance rate increases before they take effect.
"Working with my colleagues on the state level, we are sending a message to insurers that it is time to for them to put their customers first," said Sebelius. "I sent this letter to encourage governors and insurance commissioners to follow California's example and check the math on rate increases being proposed in their states and to ensure they have the strong regulatory tools they need to fight unreasonable increases."