Illinois Regulators to Ask for Control of Rate Hikes
In Illinois, state regulators will be asking lawmakers to give them the authority to approve or to deny price increases on health insurance rates in an effort to protect residents against unjustified and excessive price hikes.
Illinois Department of Insurance Director Michael McRaith, in remarks to The Associated Press, said, “We’ve heard of companies increasing rates at just explosive levels, at abusive levels, and telling (policyholders) they’re increasing rates because of health reform. We don’t have any authority to do anything about it.”
From 2008 through 2010, Illinois received 186 rate increase complaints. Some people have cited increases of 100 percent per year and many individual complaints rise to the level of outrageousness.
In May 2010, American Community Mutual Insurance Co., based in Michigan, told Illinois regulators it would raise rates on one health policy by 83 percent, after having just raised rates on the same policy 20 percent the previous December.
AXA Equitable Life Insurance Co. went up 25 percent on a health plan that had already seen a 25 percent increase in 2008. This was not a rate hike effecting new customers as the company does no longer sells insurance in the state, but was rather an increase on existing policies.
In late 2009, five customers of Prudential Financial Inc. saw a 60 percent hike on a policy that was raised 20 percent the previous year. In all cases, the hike in premiums was justified with references to “soaring medical costs” and the consequences of health care reform.
Critics, however, say that the companies are simply raising their rates to cover the expense of federally mandated changes in the industry and that little, if any, of the revenue actually translates to better health benefits for policy holders.
“Families and employers in our state pay a lot of money for health insurance,” said McRaith. “They should have some level of certainty when they pay their premium dollars that they’re getting health care in exchange.”