$1B in Premium Rate Increases Rejected in Rate Reviews
State and federal insurance premium rate reviews resulted in the denial, withdrawal or modification of an estimated $1 billion in health insurance rate increases in the individual and small group markets, according to the 2012 Annual Rate Review Report released Tuesday by the Department of Health and Human Services.
The rate review program requires insurers to publically disclose proposed increases and justify any requests to raise premiums. Although many states have long supported review programs, the federal program only went into effect on Sept. 1, 2011, so the 2012 report reflects the first nationwide effort to assess healthcare insurance premium rates.
The program includes a includes a provision of the Patient Protection and Affordable Care Act that requires premium rate reviews for increases of 10% or more in the individual and small group markets. That provision accounted for $148.4 million of the denials.
"The healthcare law is holding insurance companies accountable and saving billions of dollars for families across the country," HHS Secretary Kathleen Sebelius stated during a press conference to announce the report's release. "Thanks to the law, our healthcare system is more transparent and more competitive."