Insurers in Texas are going to have to start justifying their unreasonable rate increases.
Up until now, the Texas Department of Insurance allowed uncontested insurance rate increases of up to 50 percent unless a consumer complained. But under the federal Patient Protection and Affordable Care Act (PPACA), state regulators will require insurance companies to justify “unreasonable” premium rate increases.
Officials say no new legislation is needed for them to gain authority in this matter – they’ve had it all along, but have exercised it sparingly. Lack of resources and data have prevented the department from fully investigating all rate increases, according to Katrina Daniel, senior associate commissioner of the department’s life, health, and licensing program.
But under the PPACA, insurance companies will be required to justify “unreasonable” rate increases before imposing them. Companies also will have to post the information on their websites.
One of the key problems, according to Daniel, is that the federal government has yet to define what an “unreasonable” rate hike is.