After independent expert review, HHS determined that Trustmark Life Insurance Company has proposed unreasonable health insurance premium increases in five states—Alabama, Arizona, Pennsylvania, Virginia and Wyoming.
In these five states, Trustmark has raised rates by 13%. For small businesses in Alabama and Arizona, when combined with other rate hikes made over the last 12 months, rates have increased by 27.2% and 18.1%, respectively.
These increases were reviewed by independent experts to determine whether they are reasonable. In this case, HHS determined that the rate increases were unreasonable because the insurer would be spending a low percent of premium dollars on actual medical care and quality improvements, and because the justifications were based on unreasonable assumptions.
To make these determinations, HHS used its “rate review” authority from the Affordable Care Act (the healthcare law of 2010) to determine whether premium increases of over 10% are reasonable.
In addition to the review of rate increases, many states have the authority to reject unreasonable premium increases. Since the passage of the healthcare reform law, the number of states with this authority increased from 30 to 37, with several states extending existing “prior authority” to new markets. Examples of how states have used this authority include:
- In New Mexico, the state insurance division denied a request from Presbyterian Healthcare for a 9.7% rate hike, lowering it to 4.7%;
- In Connecticut, the state stopped Anthem Blue Cross Blue Shield, the state’s largest insurer, from hiking rates by a proposed 12.9%, instead limiting it to a 3.9% increase;
- In Oregon, the state denied a proposed 22.1% rate hike by Regence, limiting it to 12.8%;
- In New York, the state denied rate increases from Emblem, Oxford and Aetna that averaged 12.7%, instead holding them to an 8.2% increase;
- In Rhode Island, the state denied rate hikes from United Healthcare of New England ranging from 18% to 20.1%, instead seeing them cut to 9.6% to 10.6%; and
- In Pennsylvania, the state held Highmark to rate hikes ranging from 4.9% to 8.3%, down from 9.9%.
More information about the HHS’ recent decision is available at http://companyprofiles.healthcare.gov/, and general information about rate review is available at http://www.healthcare.gov/law/features/costs/rate-review/.