HHS: Trustmark's 13% rate hike is 'unreasonable'

Trustmark Life Insurance Company's proposed health insurance premium increases are "unreasonable," a Department of Health & Human Services (HHS) rate review concluded Thursday. HHS said the insurer should rescind the rates, issue refunds or justify the hike.

The Illinois-based insurer raised rates by 13 percent in September for 10,000 people in Arizona, Alabama, Pennsylvania, Virginia and Wyoming. Trustmark also increased premiums 18 percent in 2010 and 27 percent in 2009, reported Kaiser Health News.

Using its rate review authority under the health reform law to conduct an independent expert review, HHS deemed Trustmark's increase unreasonable because the insurer only spends a low percentage of premium dollars on medical care and quality improvements. Additionally, HHS said the increase was based on "unreasonable assumptions," the Virginia-Pilot reported.

Trustmark officials, however, said they "respectfully disagree" with the HHS review and still plan to implement the rate increase. The percentage of premiums Trustmark allots to benefits, known as the medical loss ratio, "can vary significantly from year to year," Trustmark spokeswoman Cindy Gallaher told the New York Times' Prescriptions blog.

Trustmark added that it "will continue to be in compliance with all aspects" of the reform law, Kaiser Health News noted. "If there are instances where we do not reach the required loss ratio as calculated under the federal regulations, we will, promptly ... rebate the difference to those customers."

To learn more:
- read the Kaiser Health News article
- see the Virginia-Pilot article
- check out the New York Times' Prescriptions blog