Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced last month that proposed rate increases by health insurance carriers were excessive and would affect over 42,000 residents in 9 states.
Health Care Reform and Rate Review
New health care reform regulations effective September 1, 2011 established the Rate Review program that requries health insurance carriers to justify any rate increase of 10% or more prior to the increase taking effect. Rate Review applies to individual and small group health insurance plans established after March 23, 2010.
Who Performs Health Insurance Rate Reviews?
The Rate Review program varies by state. HHS released a list of states with "effective rate review programs". HHS has been provided with authority to conduct rate reviews in states that do not have an effective rate review program.
As of February 2012, the following states did not have effective rate review programs in either the individual health insurance market or the small group health insurance market: Alabama, Arizona, Louisiana, Missouri, Montana, and Wyoming.
Which States Have Been Affected by Recent Unreasonable Health Insurance Rate Increases?
The rate review report cited two insurance companies with proposed increases as high as 24% in the following states:
Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska, Virgina, Wisconsin, Wyoming
What Happens When Health Insurance Carrier Rates are Unreasonable?
It depends on the state. While some state insurance departments have the authority to reject health insurance carrier rates, other state insurance departments review the health insurance premium rate increases but do not have the authority to reject them.
Are you aware of health insurance rate increases in your state? Click here to review health insurance rate increases by state.