Health and Human Services Secretary Kathleen Sebelius has sent a letter that has been interpreted as a warning to insurance companies. She has made it clear that there will be “zero tolerance” for insurance companies who try and use the Affordable Care Act as an excuse to raise their premiums.
Sebelius recently sent a strongly worded letter to a Washington D. C. based association of insurers informing them that there will be “zero tolerance” for spreading misinformation, and for creating unjustified rate increases. In other words, Seblieus wants insurers to stop raising their premiums, and pointing to the Affordable Care Act as the reason why consumers are paying more for insurance. It has also been said that insurers who have a record of unjustified rate increases might find themselves excluded from the health insurance exchanges that will be created in 2014. In other words, Sebelius is taking this issue very seriously.
The Affordable Care Act is a series of health insurance reforms that are designed to give American’s more health care choices, to enhance the quality of health care, and to make health care more affordable for everyone. These insurance reforms are also supposed to prevent insurance companies from refusing to pay for necessary medical care, or refusing customers who have pre-existing conditions.
Some insurance companies have decided to exit the market entirely, because they don’t like the new reforms. Other companies are telling people that they can no longer afford to offer individual accident and health insurance policies, specifically because of the new reforms. Some people are critical of the insurance industry, including Rep. Pete Stark, a Democrat from California. He says that insurance companies are making billions more in profits now, then they had in previous years. The implication is that insurance companies are pretending to be hurting, when they are not, so they can be greedy, and demand higher premiums from consumers. Sebelius estimates that the new health insurance reforms shouldn’t raise premiums by more than one or two percent. It is worth noting that, according to Sebelius, the new health insurance provisions had been fully supported by the health insurer’s associations.
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