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Pallone Launches Investigation of Insurance Rate Hikes
Wants Full Explanation of Double-Digit Increases For Long-Term Care Policies |
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Washington, D.C. - U.S. Rep. Frank Pallone, Jr. announced on Friday that he has launched a probe of the double-digit rate hikes for long-term care insurance, starting with companies that imposed the sudden increases on policy holders in New Jersey. Congressman Pallone, the chairman of the House Energy & Commerce Health Subcommittee, initiated the investigation by sending official requests to the firms for all the information they used to hike the rates.
"I want to see the justification for these rate hikes." said Pallone. "The insurance industry needs to be held accountable when its actions have such a severe impact on consumers and their health care policies. Policy holders will have a hard time holding on to their coverage if they are hit with increases this great, even if they've held policies for years."
The document requests went to Lincoln National, Metlife of Connecticut, American General (formerly AIG), and Allinz, companies that raised rates by 25 percent to 35 percent on their New Jersey policy holders.
A critical review of the information the companies used is a first step in a probe of the process and the decisions that are behind the rate hikes, Pallone said. The subcommittee will also review the documentation supplied to the New Jersey Department of Banking and Insurance, which approved the increases.
Pallone said that long-term care, which includes nursing homes, is an increasingly-important sector of the health care industry. Currently, there are 10 million Americans in need of long-term services, Pallone said. With an aging population, that number is expected to grow to nearly 15 million within 10 years, he added.
Pallone is the author, along with the late Senator Edward Kennedy, of the Community Living Assistance Services and Support Act, known as the CLASS Act, that establishes a new long-term care insurance program that will focus on community-based care. The act, which was folded into the health reform plan, will be phased-in over four years starting this year. Pallone called it a good first step in addressing the need for long-term care but much more needs to be done. |
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