The federal government moved today to significantly tighten oversight of health insurance premiums by helping states allow the public to more easily get involved in the rate increase process.
It did so by announcing that effective later this month, consumers in every state can go to a federally-maintained website to view information explaining many proposed increases in the individual and small group market.
It also clarified that coverage sold to individuals or small groups through an association is subject to rate review, on or after November 1, 2011.
The new disclosures coincided with the effective date of the agency’s rate review authority regulation. The rule was imposed by HHS under the Patient Protection and Affordable Care Act.
However, some states, such as Connecticut and California, have already used the new authority to force insurers to reduce proposed rate increases
Under the regulation, health insurers seeking to increase their rates by 10% or more must now submit their request to state or federal reviewers to determine whether they are reasonable or not.
Prior to PPACA, many states lacked the authority to review proposed increases to determine if they are reasonable or to act to limit rate increases, while others did not have the money to effectively review rates.
By accessing the website, consumers will be able to see a summary of the factors driving rate increases and an explanation provided by insurance companies for the proposed increase, HHS officials said.
In announcing that the rate review rule was now in effect, HHS official note that the agency has provided $250 million in grants to states to use to improve oversight of health insurance rates.
“Without oversight, scrutiny and public information, consumers and small businesses had few tools to protect against rate increases,” HHS officials said.
HHS said that as of today, insurers proposing double-digit increases will have to provide clear information that indicates what factors are causing proposed increases.
“Experts will closely examine information about the underlying cost trends in health care to flag instances when insurance companies are unjustly raising costs,” HHS officials said.