HHS Issues Final Regulation on Health Insurance Rate Hikes
- A consumer-friendly disclosure form explaining the proposed increases will be made available through HHS, state and/or insurer websites.
- States with effective rate review systems will conduct the reviews. If a state lacks the resources or authority to conduct actuarial reviews, HHS will conduct them.
- On Sept. 1, 2012, the 10% threshold will be replaced with a state-specific threshold, using data that reflect insurance and healthcare cost trends particular to that state. HHS and the states will work together to develop the thresholds.
The regulation does not apply to the large group or the association business. Steve Larsen, director for the center for consumer information and insurance oversight, said on the conference call that purchasers in the large group market "are more sophisticated and don't need assistance" in securing fair rate increases. He added that the inclusion of association business will be revisited after additional comments are collected by the department.
In a press statement challenging the rate review rule, America's Health Insurance Plans' president and CEO Karen Ignagni said, "Premium review must adequately factor in all of the components that determine premium rates, including geographic variation, the cost of new benefit mandates, and the impact of younger and healthier people dropping coverage. An arbitrary threshold for review will establish a de facto presumption of unreasonableness in what should be an objective, actuarially-based evaluation."
She agreed that states "are best suited to review premiums because they have the experience, infrastructure, and local market knowledge needed to ensure that consumers are protected and health plans are solvent. The federal government is not in a position to make these assessments."
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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