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December 31, 2015 at 07:04 AM
The U.S. Department of Health and Human Services (HHS) says in a new report that the Patient Protection and Affordable Care Act (PPACA) rate review program has done a good job of increasing health insurance rate transparency and holding down premiums.
HHS officials say issuers filed 1,933 product rate filings for returning individual market products for 2015 and asked for double-digit rate increases in 443 of those filings. The rate review process helped cut the number of double-digit increases actually implemented to 337, officials say.
See also: PPACA rate review program expands
The rate review process helped cut the average implemented rate increase to 6.9 percent, from 8.7 percent, officials say.
In the small-group market, officials say, issuers proposed double-digit rate increases for 251 of the 2,377 returning products and actually implemented 220 of the double-digit increases.
The rate review process helped cut the average small-group increase to 4.3 percent, from 5.1 percent, officials say.
The PPACA rate review program requires issuers of non-grandfathered individual and small-group coverage to send justifications for proposed rate increases of 10 percent or more to HHS. Regulators at HHS or in state agencies are supposed to review the proposals for reasonableness.
Some states, such as New York state, give state insurance regulators the authority to reject or change unreasonable rate proposals, but PPACA itself does not give regulators that kind of authority. Regulators who lack official rate-change authority may work behind the scenes to press issuers for lower rates, or, in some cases, they may try to use publicity as a tool for persuading issuers to reduce increases.
See also: California measure would let consumers sue over health rates
Critics have complained that the PPACA rate review process does not appear to take the need to maintain the solvency of the issuer into account, and that arbitrary regulator moves to cut proposed increases may have contributed to the failure of issuers such as Health Republic Insurance of New York.
Critics have also argued that, because of a rushed rate-setting process, insurers had little concrete information about how individual policies had performed in 2014, the year in which major PPACA underwriting restrictions and benefits mandates took effect, when they set their 2015 and 2016 rates.
