Trustmark Life Insurance Co. has run afoul of federal insurance regulators who claim that the company has raised rates for health insurance to unreasonable levels. The insurer has raised rates in five states by at least 13%, according to the Department of Health and Human Services. These states are Arizona, Virginia, Wyoming, Pennsylvania and Alabama. The Affordable Care Act requires insurers to submit their rate proposals for federal review if they pass the 10% mark.
The Department of Health and Human Services has ordered the insurer to rescind the rate hikes and issue refunds to consumers. If the insurer refuses to do so, they will have to offer a public explanation describing why. Trustmark asserts that the higher rates are necessary in order to stay competitive and to keep up with the rising costs of medical care. While regulators have ordered the insurer to rescind its rate increases, they have no authority to force the company to do so.
Some analysts have taken issue with the federal government’s targeting of Trustmark. Robert Laszewski, an insurance consultant based in Virginia with more than two decades of experience in the industry, claims that Trustmark’s policies are highly competitive, making it a formidable opponent for larger insurance corporations with a wider variety of policies. Forcing the insurer to adhere to dubious regulations may be enough to put it out of business.
