By Bruce Japsen | A bill that would require health plans to submit their rate increases to government regulators before they take effect is gaining momentum in Congress.

The Health Insurance Rate Authority Act of 2010 was introduced this week by Rep. Jan Schakowsky (D-Ill.) and Sen. Diane Feinstein (D-Calif.) to give Secretary of Health and Human Services Kathleen Sebelius “the authority to deny or modify premium and rate increases found to be unreasonable.”

It’s the latest salvo in a push by Democrats in Congress and the Obama administration to make insurance companies justify their rate increases. The act could become its own law or woven into health care reform bills President Obama is hoping to see passed later this month.

Schakowsky cited rate increases of up to 60 percent this year for individual customers in Illinois that were reported by the Tribune last week. Premium increases as high as 39 percent in California also have outraged Feinstein and other members of Congress. Such rate hikes are far outpace medical inflation trends, which are generally in the high single-digit percentages, industry analysts say.

“Their unreasonable and oftentimes surprise rate increases price people and employers out of health care, forcing families to live on a shoestring budget and pushing small businesses to drop coverage,” Schakowsky said.

The legislation calls for an advisory committee, called the Health Insurance Rate Authority, to help determine the causes of rate increases, offering “recommendations for corrective actions,” Schakowsky said. Cash-strapped states like Illinois would be able to access $250 million in federal dollars to help implement these policies and collect information from insurance companies.

The health insurance industry says the legislation is misdirected.

“Health insurance premiums are increasing in the individual insurance market because of soaring medical costs and a weak economy that is causing younger and healthier people to drop their coverage,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, which represents the nation’s largest insurance companies. “Health plans have worked with the National Association of Insurance Commissioners on these issues and will continue to work with them to create a more uniform process and more transparency for consumers.”

Earlier this week, Sebelius wrote letters to Chicago-based Health Care Service Corp., parent of Blue Cross and Blue Shield of Illinois, and four other health plans requesting they justify their 2010 rate increases. Her letter followed a meeting last Thursday with chief executives of Health Care Service, Wellpoint Inc., Aetna Inc., UnitedHealth Group and Cigna Corp.

Health plans are not ruling out complying with Sebelius requests, saying they are trying to find a way to do so.