In a new comment letter to the Department of Health and Human Services, America’s Health Insurance Plans said the 10% trigger for review of rate hike requests will unfairly establish a de facto presumption that a proposed increase is too high.
The AHIP letter argues that decisions on whether a requested rate increase is too high should be actuarially-based and solvency-based.
The AHIP letter was in response to a request for comment by HHS on its proposal that a 10% rate hike request will trigger a rate review by states and the federal agency.
The proposal is included in regulations HHS has proposed as part of its efforts to implement the new healthcare reform plan, the Patient Protection and Affordable Care Act.
“We urge reconsideration of the approach of choosing a specific numerical benchmark,” the letter states. “And [we] would suggest that the 10% threshold is not a reasonable threshold.”
The letter says that health plan solvency is threatened if healthcare costs continue to grow unabated, but actuarially justified rate increases are not allowed to go into effect.
“Such suppression of rate increases would also significantly add to premium fluctuations, creating needless volatility for consumers and new burdensome and unnecessary administrative costs,” the letter says.