Insurance Premium Rate Reviews

The Affordable Care Act (ACA) includes provisions to increase the scrutiny and transparency of health insurance rate increases. Beginning in 2011, the law requires that insurance companies publicly justify any unreasonable rate increases.


 

Government Resources  

News Release: Health Insurance Rate Hikes in Nine States Deemed Excessive by HHS, 3/22/12 (New) 
2012 Progress Report, 3/22/12 (New) 

Affordable Care Act Holding Insurers Accountable for Premium Hikes
, HHS, 1/12/12

Consumers can check on rate increases (and medical loss ratios in 2012) for specific insurance companies at this website: Your Insurance Company & Rate Increases. 10/7/11   

HHS announced Affordable Care Act grant awards of $109 million to 28 states and the District of Columbia that will help curtail unreasonable premium increases. HHS also released a new report entitled Rate Review Works detailing how previous rate review grants are fighting premium hikes and helping make the health insurance marketplace more transparent. 

 
HHS has amended the final regulations on health insurance rate increases subject to review. The amendment changes the definitions of "individual market" and "small group market"  and updates the standards for disclosure and review of unreasonable premium increases. The amended regulations are effective November 1, 2011. 

The Government Accountability Office (GAO) released a report entitled, Private Health Insurance: State Oversight of Premium Rates. 7/29/11  

The Center for Consumer Information & Insurance Oversight (CCIIO) has released a fact sheet on the states' progress in adopting standards for health insurance rate reviews required by the Affordable Care Act. 7/6/11  

The Department of Health and Human Services (HHS) has issued final regulations to require review and disclosure of large health insurance premium increases and the reasons for those increases. Starting September 1, 2011, the rule requires independent experts to scrutinize any proposed increase of 10-percent or more for most individual and small group health insurance plans. Starting September 2012, the 10-percent threshold will be replaced by state-specific thresholds that reflect the insurance and health care cost trends in each state. The final rule clarifies that HHS will work with states in developing these thresholds.

The rule requires insurance companies to provide consumers with easy to understand information about the reasons for unreasonable rate increases and post the justification for those hikes on their website as well as on the HHS Affordable Care Act website, www.healthcare.gov .

The regulation finalizes proposed rules issued in December 2010. The final rule has several additions to the proposed rule, including a requirement that states provide an opportunity for public input in the evaluation of rate increases subject to review. The final rules are effective July 18, 2011. HHS is requesting comment from the public (until July 18, 2011) on applying the rule to individual and small group coverage sold through associations, which is sometimes exempt from state oversight. 

The Centers for Medicare & Medicaid Services (CMS) published proposed consumer disclosure notices, required by the Affordable Care Act, that insurers would be required to complete and report electronically when they propose rate increases over 10 percent. 3/7/11    

HHS issued proposed regulations to allow HHS to work with states to require insurers to publicly disclose and justify unreasonable rate increases. 

HHS issued a news release on the grant awards of $46 million to states to promote improvements in the oversight of health insurance premium increases and take action against insurers who raise premiums unreasonably. 8/16/10 

HHS announced in a news release the availability of $51 million in Health Insurance Premium Review Grants through the Affordable Care Act.  These funds are the first round of grants available to states through a new grant program to create and strengthen insurance rate review processes. 6/7/10
 

Analysis