Administration Tells Regulated Industry That There Will Be “Zero Tolerance” for Alleged “Misinformation” in Industry’s Statements About Government Policy

From the Department of Health & Human Services:

Sebelius calls on health insurers to stop misinformation and unjustified rate increases

Affordable Care Act will help lower costs and crack down on unjustified rate increases …

U.S. Department of Health and Human Services Secretary Kathleen Sebelius wrote America’s Health Insurance Plans (AHIP), the national association of health insurers, calling on their members to stop using scare tactics and misinformation to falsely blame premium increases for 2011 on the patient protections in the Affordable Care Act….

It has come to my attention that several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act. I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases….

According to our analysis and those of some industry and academic experts, any potential premium impact from the new consumer protections and increased quality provisions under the Affordable Care Act will be minimal…. Any premium increases will be moderated by out-of-pocket savings resulting from the law….

Given the importance of the new protections and the facts about their impact on costs, I ask for your help in stopping misinformation and scare tactics about the Affordable Care Act. Moreover, I want AHIP’s members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections….

Already, my Department has provided 46 states with resources to strengthen the review and transparency of proposed premiums. Later this fall, we will issue a regulation that will require state or federal review of all potentially unreasonable rate increases filed by health insurers, with the justification for increases posted publicly for consumers and employers. We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014. Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections….

It is my hope we can work together to stop misinformation and misleading marketing from the start….

The precise nature of the threat — as with so many threats — is not made entirely clear, so the legal analysis of the threat is also unclear. For instance, if the “zero tolerance for … misinformation” policy simply means that the government will respond to misinformation with public criticism, that is permissible.

But if the Administration is threatening to use its considerable regulatory power to retaliate against insurance companies that, in the Administration’s view, are conveying “misinformation” — for instance, because their financial analyses disagree with the Administration’s financial analyses — that strikes me as quite troubling.

I suppose the Administration could defend some such regulatory action on the grounds that the letters to enrollees are a form of commercial advertising, and are therefore constitutionally unprotected if they are “misleading.” Still, even if such action would be constitutionally permissible, it would be quite troubling, as would threats that seem to hint as such action: It would involve the Administration’s deliberately trying to suppress criticism of its policies, under a “misinformation” standard that sounds highly subjective and politically contestable. (Consider the reference “to our analysis and those of some industry and academic experts” — what about the analysis of other industry and academic experts?)

Perhaps I’m missing some important context here. But my first reaction is that this is ominous behavior on the Administration’s part, and seems to have both the intent and effect of suppressing criticism of the Administration’s policies — including criticism that simply expresses opinions the Administration dislikes, and makes estimates that it disagrees with, and not just criticism that contains objectively demonstrable “misinformation.”

Thanks to InstaPundit for the pointer.