In early September, Health and Human Services Secretary Kathleen Sebelius — throwing her new weight around after the passage of Obamacare — threatened the health insurance industry with a letter that spelled out "zero tolerance" for "unjustified rate increases."
This week, her agency unveiled a new rule that allows the federal government to decide what counts as an "unreasonable" rate increase. The upshot: If an insurance company increases the cost of a premium to above 10 percent, it may well feel the wrath of the feds.
There's just one problem: Under Obamacare, the federal government does not have the authority to block or overturn an insurance price increase. (Congress debated whether or not to give the Health and Human Services Department this authority during the crafting of the legislation, but it was ultimately rejected.) In point of fact, 43 states already regulate and approve rates in the individual or small business market through their insurance commissioners. This new law would let them continue to do their job — unless the federal government were to decide that their reviews weren't "effective." Once again, government is overreaching and telling private business what to do.
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