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States Strengthen Insurance Hike Oversight

Cheryl Clark, for HealthLeaders Media, August 4, 2011

Officials from more than one-third of the nation's states have introduced or passed legislation to strengthen legislative authority over health insurance premium rates, while two-thirds say they are working on such strategies, according to a Government Accountability Office report.

GAO launched its review in part because of numerous large premium increases from major insurers last year, affecting many of the 173 million non-elderly Americans who have private health coverage.

Also, under the Patient Protection and Affordable Care Act, the Department of Health and Human Services can award grants$250 million over five years—to most states to help them enhance their ability to oversee such rate increases. As of June 2010, 46 states have received $1 million each.

"In a 2010 survey, over three-quarters of U.S. consumers with individually purchased private health plans reported health insurance premium increases," and of those reporting increases, the average increase was 20% wrote John E. Dicken, the GAO's director of healthcare and the author of the report.

"Policymakers have raised questions about the extent to which these increases in health insurance premiums are justified and could adversely affect consumers."

The GAO found that, as expected, insurance rate oversight practices vary widely from state to state on the extent and timing of reviews, information considered in the reviews, and opportunities for consumer involvement. For example, one state allows insurance companies to begin using a new premium rate, and then file it with the state, rather than filing it before putting it into practice.

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