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Kaiser: Rate reviews non-events in some states

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A new health insurance rate increase review program created by the Patient Protection and Affordable Care Act of 2010 (PPACA) has had a bigger direct effect on rates on some states than on others.

Analysts at the Henry J. Kaiser Family Foundation talk about the effects in an analysis of PPACA rate review program performance statistics. 

The analysts looked at 798 individual and small group rate filing reviews that were handled by state officials, or by officials in the District of Columbia.

The rate review program may have skewed the results by scaring insurers away from filing some increase requests in the first place, or by persuading health insurers to reduce the size of the increase request below what they normally would have considered reasonably.

But the figures for the increase requests actually filed and reviewed show that the reviews cut the average rate change implemented to 5.4 percent, from an average change request of 6.8 percent.

The program

PPACA does not give state or federal regulators the authority to limit rate increases, but it does give HHS the authority to require health insurers to explain what HHS believes to be “unreasonable” rate increases on the Web.


HHS is now requiring insurers to justify increase requests of 10 percent or more.

HHS handles reviews for some states, and state regulators handle the reviews in others.

The review rules took effect Sep. 1, 2011.

Behind the averages

The state PPACA rate reviews had the biggest impact in Iowa, Nevada, Oregon and  South Carolina. In each of those states, the reviews cut the average rate change by 4 percentage points or more. In South Carolina, for example, the reviews cut the average implemented change for two filings to 4 percent, from 12 percent.

In Iowa, the reviews cut the average change for 33 filings to 7.2 percent, from 12 percent.

But the Kaiser analysts also found that reviews had little effect on changes in some states.

In Georgia, Illinois, Minnesota, New Jersey, Ohio, South Dakota, Texas, Utah, Virginia, West Virginia, Wisconsin and the District of Columbia, the average rate change implemented was the same as the average rate change requested.

In those 12 jurisdictions, no rate increase filings were lowered, rejected or withdrawn, according to the Kaiser analysts.

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