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Health Insurers' Tie Proposed Rate Hikes to Health Care Reform

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Health insurers across the country are planning to raise premiums for some of their customers in the coming weeks, the Wall Street Journal reports, and they are in part blaming President Obama's health care reform package for the rate hikes.

On the surface, at least, the news boosts Republicans' arguments against the Democrats' reforms ahead of this year's midterm elections. But the White House and other supporters of the reform package say they are skeptical of the health insurance companies' rationale.

Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked regulators to approve premium increases of between one percent and nine percent to pay for the bill's early benefits, the Journal reports. The rate increases would largely apply to individual plans (9 percent of Americans have individual plans) and those offered for small businesses (about 20 percent of Americans get coverage from small employers).

The early benefits cited by insurers for the rate increase include allowing children up to 26 years old to stay on their parents' health care plans, eliminating co-payments for preventive care and prohibiting insurers from denying coverage to children with pre-existing conditions. These benefits apply to all plans, not just individual and small business policies.

The insurers are also reportedly asking for further rate increases they are not tying to the health care overhaul that they say are needed to cover rising medical costs. Some customers could see their premiums increase by more than 20 percent.

Nancy-Ann DeParle, the director of the White House Office of Health Reform, told the Journal that insurers were using the new health reforms as an excuse to raise rates.

"I would have real deep concerns that the kinds of rate increases that you're quoting... are justified," she said. "We believe consumers will see through this."

Health Care for America Now, a coalition group in support of the health care overhaul, slammed the insurance industry and pointed to insurers' history as evidence that its latest claims were misleading. For instance, WellPoint's Anthem subsidiary had to reduce its proposed rate hike in California earlier this year after it tried to justify increases as high as 39 percent with erroneous numbers.

"The health insurance industry is doing the same thing it has always done, raising premiums to achieve excessive profits and outrageous salaries for their CEOs," HCAN executive director Ethan Rome said in a statement.

The complaints haven't stopped Republicans from jumping on the opportunity to criticize the Democrats' policies. Senate Republicans are highlighting the Journal's report while pointing to past comments from Mr. Obama and other Democrats, who promised that premiums would not increase as a result of the reforms.

In Kentucky, Republican Senate candidate Rand Paul slammed health care reforms in his first general election ad.

The health care overhaul has proven to be a harder sell to the American people than Democrats anticipated, prompting at least a handful of Democrats up for re-election to campaign on their vote against the reforms. Moderate Democrat Stephanie Herseth Sandlin (S.D.), for instance, says in an ad that she voted against the bill because "it wasn't right for South Dakota."