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PPACA: Commissioners Not Sure Where to Set Rate Review Trigger

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State insurance commissioners disagree about how high a proposed health insurance rate increase ought to be before it gets the attention of federal regulators.

Officials at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., discuss that lack of agreement in a comment letter they have sent to U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius.

The officials sent the letter to comment on the Rate Increase Disclosure and Review Notice of Proposed Rulemaking that HHS published in the Federal Register in December 2010.

HHS drafted the notice to implement Section 154.200 of the Patient Protection and Affordable Care Act (PPACA), a component of the Affordable Care Act.

Republicans are trying to block implementation of the act.

If the act takes effect as written, the rate review section of PPACA would apply to rate increases filed on or after July 1, 2011, in states that do not require reviews of health insurance rate increases.

HHS has proposed reviewing rate increases for 10% or more to see

if they appear to be reasonable or unreasonable.

“The NAIC recognizes the value of and supports efforts to enhance market transparency and is very appreciative of HHS’ recognition that state-specific thresholds are more appropriate for determining potentially unreasonable rate increases,” officials say in the NAIC letter.

Some commissioners think the 10% threshold is too low and would require too many rate reviews, and some think it’s too high, officials say.

Some states would like at least 6 more months after a final regulation is promulgated to develop their own, state-specific thresholds, officials say.

“While there is no consensus on when to transition to state-based thresholds, commissioners agree that we should move quickly,” officials say. “The proposed regulation does not indicate how the secretary will determine the state-based threshold, but since individual states understand their health insurance markets best, maximum flexibility in determining a threshold amount should be given to the states.”

Other coverage of health insurance rate reviews from National Underwriter Life & Health:


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