Obamacare Regulation of Health Insurance Premiums: Make Your Voice Heard!

Americans for Limited Government has been closely monitoring Obamacare regulations for instances where the Obama Administration chooses to ignore the law by implementing regulations that exceed the statutory authority they have been given.

An underused method for citizens to express their concerns to government bureaucracies is the process of commenting on regulations. Agencies are required by law to give a reasoned response to every argument they receive through comments.

Today, we took advantage of this process by submitting to the Department of Health and Human Services (HHS), our concerns with their proposed Obamacare regulation, “Rate Increase Disclosure and Review.”


The proposed regulation would require insurance companies to submit their policies for review whenever they raise their rates by more than 10%. A review will then be conducted to determine whether the rate increase is “unreasonable.” If HHS deems the rate review process of a state “adequate,” then HHS will allow the state to conduct the review. If, however, HHS considers the state’s process inadequate—or if the state has chosen not to implement a rate review process at all—HHS will review the policy in place of the state.

The regulation will require any insurance company whose rate increase is deemed to be “unreasonable” to post a justification for the increase on their website.

The Obama Administration has rightly recognized that Congress has not given them the power to prevent an insurance company from raising its rates. However, as will be explained below, the Obama Administration ignores the plain language of the law which makes state cooperation necessary before HHS’s has the power to require insurance companies to participate in this process.

Propaganda Tool

Instead of focusing on the true reasons for rising costs, Secretary of HHS, Kathleen Sebelius, has been on a crusade against insurance companies who are raising their rates.

In California, when Blue Shield of California (BSC) raised its rates, Sec. Sebelius issued a statement condemning the increase. The condemnation came despite not having seen BSC’s numbers, basing it on the concerns of California State Insurance Commissioner Dave Jones—who had also not reviewed BSC’s numbers, and not mentioning in the statement that BSC is not a money-grubbing corporation but, in fact, a nonprofit organization.

The current administration, to foster its ideological belief that a “benevolent” government is needed to oversee corporations presumed to be evil, must have tools it can use to propagate its ideology to the public. This proposed regulation is merely a propaganda tool for those who believe in more government control.

Goes Beyond Powers Granted by Congress

The Secretary, in conjunction with States, shall establish a process for the annual review … of unreasonable increases in premiums for health insurance coverage.

In our comment we explain in detail that the language of the Obamacare statute gives the Secretary the power to establish a process to review health insurance premium increases only where states have acted in conjunction with the Secretary.

For practical purposes, this means that this regulation has no effect in states that choose not to cooperate and have not taken federal grants to implement this program.

An Attack on Federalism

Presidents, beginning with Ronald Reagan, have required federal agencies to determine whether their proposed regulations place unfunded mandates on states or otherwise usurp state power. The current Executive Order (E.O. 13132) states:

National action limiting the policymaking discretion of the States shall be taken only where there is constitutional and statutory authority for the action and the national activity.

Since the Obama Administration has exceeded its statutory authority in the proposed regulation, the regulation violates Executive Order 13132.

What's Next

This regulation gives federal bureaucracy a foothold in premium rate review--an area that was formerly regulated solely by the states.

Certain liberal congressmen have introduced SB 137 and HB416. Instead of regulating just "unreasonable increases in premiums," this bill would regulate "excessive, unjustified, or unfairly discriminatory rates, including premiums." Notably, the bill does nothing to define these terms.

Also, the bill purports to give the Secretary the power to "deny rates," "modify rates," or require that rebates be given to consumers.

While these bills are not law and are unlikely to pass in the current Congress, These bills give us an idea of what ground the Obama Administration would like to take next.

Your Turn

If you wish to submit your own comment on this regulation, you may do so at Regulations.gov. To prepare, we recommend that you read the proposed regulation and our Comment.

As any information you submit will become part of the public record, do not include any information you do not want to become public.

Finally, act quickly—comments must be received by February 22, 2011.