The Centers for Medicare & Medicaid Services (CMS) want state health insurance rate reviewers to assume that two major Patient Protection and Affordable Care Act (PPACA) risk-management programs will work.
Kevin Counihan, director of the Center for Consumer Information & Insurance Oversight (CCIIO), the CMS division in charge of handling the PPACA provisions that affect the commercial health insurance, talks about the PPACA reinsurance program and the PPACA risk corridors program in a letter sent Tuesday to state insurance commissioners.
PPACA does not give state regulators the authority to reject or change rate proposals, but it does encourage regulators to review insurer moves to increase rates more than 10 percent; to declare whether rate increases appear to be unreasonable; and to negotiate with issuers in an effort to lower unreasonable increases.
PPACA banned many of the underwriting and product design features that insurers had been using to hold claim costs down. CMS has provided no readily available information on 2014 claim costs or 2015 claim costs. Some have argued that 2014 claim costs were much higher than insurers had expected.
Counihan says the latest reports suggest that the uninsured consumers who have signed up for coverage this year, during the second PPACA open enrollment period, are healthier than the consumers who signed up during the first open enrollment period.
“Many issuers are reporting a decline in pent-up demand for services,” Counihan writes in the letter.